“Euro-area manufacturing and services activity weakened in June amid a further slowdown in France’s economy, underscoring the fragility of the recovery in the 18-nation region.
A Purchasing Managers Index for both industries slipped to 52.8 in June from 53.5, Markit Economics said today. That’s the 12th month the gauge has exceeded 50, the mark that signals expansion. Economists predicted a reading of 53.4, according to the median of 25 estimates in a Bloomberg News survey. A measure of Chinese manufacturing rose to a seven-month high.
The euro area is struggling to sustain a recovery that received a bleak assessment from the International Monetary Fund on June 20. Earlier this month, the European Central Bank introduced a negative deposit rate, announced targeted loans to stimulate lending and held out the prospect of asset purchases to stoke growth and inflation in the region.
“The pace of recovery is slowing down,” said Martin van Vliet, senior economist at ING Groep NV in Amsterdam. “The further weakening of the PMI vindicates the ECB’s recent decision to implement further monetary easing.”
The euro dropped 0.1 percent today and traded at $1.3582 at 10:55 a.m. Frankfurt time. The Stoxx Europe 600 Index is down 0.6 percent at 346.15.
Chinese Manufacturing
In China, a preliminary factory PMI from HSBC Holdings Plc and Markit rose to 50.8, exceeding the 49.7 median estimate of analysts surveyed by Bloomberg News, and a final reading of 49.4 in May.
The euro area’s manufacturing gauge fell to 51.9 in June after 52.2 in May, and the measure for services eased to 52.8 from 53.2.
“Hopefully the recent stimulus measures from the ECB will help revive growth again……”
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