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Euro zone manufacturing PMI falls to 22-month low in July

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Forexpros - Manufacturing activity in the euro zone fell more-than-expected in July, falling to an 22-month low, preliminary data showed on Thursday.

In a report, market research group Markit said that its preliminary manufacturing purchasing managers' index fell to a seasonally adjusted 50.4 in July, down from 52.0 in June.

Analysts had expected the index to decline to 51.5 in July.

On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

The report showed that service sector activity in the euro zone dropped to a 22-month low in July.

The preliminary services purchasing managers' index fell to a seasonally adjusted 51.4 in July compared to a reading of 53.7 in June. Analysts had expected the index to ease down to 53.2.

The latest reading was the lowest since August 2009 and signaled a near-stagnation of private sector output, the rate of growth having slowed sharply in each of the past three months.

The month-on-month fall in the Output Index in July was the largest since November 2008.

Commenting on the report, Chris Williamson, Chief Economist at Markit said, "Surging growth in Germany and France during the first quarter has been replaced by only very modest rates of expansion at the start of the third quarter, while, the rest of the regions slipped deeper into contraction."

Following the release of the data, the euro was up against the U.S. dollar, with EUR/USD adding 0.2% to trade at 1.4244.

Meanwhile, European stock markets were down after the open. The EURO STOXX 50 fell 0.25%, France's CAC 40 dipped 0.4%, the FTSE 100 declined 0.35%, while Germany's DAX slumped 0.6%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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