Markit report: Euro zone PMI down 52.8 in June

Nathan Andrada – Fourth Estate Cooperative Contributor

Paris, France (4E) – Economic activity in the euro area fell in June to a six-month low, according to a business survey released Monday.

Research firm Markit’s Purchasing Managers’ Index (PMI), which gauges private sector activity, dropped to 52.8 in June from 53.5 in the prior month. A reading above 50 signals month-on-month growth in activity.

Markit said that the signs show that the recovery in the common currency bloc is losing momentum.

Monday’s report showed businesses continued to reduce prices to increase sales in June, but faced challenges likes rising oil prices. However, output in manufacturing and services sectors jumped for the 12th consecutive month.

An increase in orders in the services sector may boost growth in the euro area.

The International Monetary Fund (IMF) feels the pace of economic recovery in the euro area is a concern, saying that the rate recovery had not been fast enough.

The European Central Bank introduced a series of measures beginning earlier this month aimed to spur the euro zone economy, which include inexpensive long-term loans to banks as well as negative interest rates.

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