Euro zone business activity returned to growth in July for the first time in four months, driven by a rebound in new orders, even as high inflation and renewed conflict in the Middle East clouded the outlook, a survey showed today.<\/p>\n
The S&P Global Flash Euro zone Composite PMI Output Index rose to 51.9 in July from June’s 50, its highest reading in five months and far above an expectation in a Reuters poll for a modest rise to 50.3.<\/p>\n
A reading above 50 signals an expansion in activity.<\/p>\n
“July is seeing a welcome revival of economic activity in the euro zone, but a volatile geopolitical environment means it remains to be seen if the good news can last,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.<\/p>\n
New orders grew for the first time since February, with the pace of expansion the fastest since April 2023. Export orders, which include intra-euro zone trade, continued to decline, but the rate of decrease was the least pronounced since March 2022.<\/p>\n
Both manufacturing and services contributed to the output rebound. Services recovered to a five-month high of 51.6, up from 49.4, snapping three months of contraction and confounding the Reuters poll for another month of declining activity.<\/p>\n
Manufacturing output growth hit a 52-month high and the headline factory PMI rose to 52 from 51.4, above the poll estimate for 51.5.<\/p>\n
Germany, the euro zone’s largest economy, returned to growth for the first time in four months. France’s output continued to fall, though only marginally, a softer decline than in June. The rest of the euro zone posted its strongest expansion in eight months.<\/p>\n
Staffing levels rose, marking a shift after months of job shedding. The increase was marginal, as continued cuts in manufacturing employment tempered gains in the services industry.<\/p>\n
“After a largely stagnant second quarter, there has been something of a bounce in demand during July which takes the PMI up to a level indicative of GDP growing at a reasonably solid 0.3% quarterly pace,” Williamson added.<\/p>\n
The rate of overall input cost inflation eased to its lowest since February – at the end of which the Middle East conflict erupted – although pressures remained sharp.<\/p>\n
Output price inflation also slowed. The easing may reduce pressure on the European Central Bank, which left its key deposit rate at 2.25% this week. A recent Reuters poll suggested the bank would raise it by 25 basis points in September.<\/p>\n
The euro zone economy contracted 0.2% in the first quarter of 2026, weighed down by the impact of the Middle East conflict on energy supplies and inflation.<\/p>\n
The July PMI data suggests the bloc may be gaining some momentum heading into the second half of the year, though risks remain acute.<\/p>\n","protected":false},"excerpt":{"rendered":"Euro zone business activity returned to growth in July for the first time in four months, driven by…\n","protected":false},"author":2,"featured_media":468056,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-566343","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/566343","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=566343"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/566343\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/468056"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=566343"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=566343"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=566343"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}