Euro-Area Services Grew Less Than Initially Estimated in JulyStefan Riecher
Euro-area services expanded less than initially estimated last month, keeping alive concerns about the outlook for the recovery in the 18-nation region.
Markit Economics’s Purchasing Managers Index rose to 54.2 from 52.8 in June, below the 54.4 reading published on July 24. A composite index of services and manufacturing increased to 53.8, also lower than previously estimated.
“The survey suggests that euro-zone GDP is growing at a quarterly rate of 0.4 percent, but the worry is that this is still only generating very modest job creation,” said Chris Williamson, chief economist at Markit in London. “There’s also a great deal of uncertainty as to which direction the pace of growth will take in coming months.”
With the euro-region economy slowly gathering pace, the European Central Bank may face little urgency to provide more stimulus anytime soon after introducing an unprecedented package of measures in June. At the same time, ECB President Mario Draghi has said he’ll act again if needed.
National reports from Markit showed services indexes rose in Germany, France and Spain in July. In Italy, the gauge declined to 52.8 from 53.9 in June, which was the highest since 2010. Italy’s economy grew 0.1 percent in the second quarter after shrinking 0.1 percent in the previous three months, economists forecast before a report tomorrow.
Markit’s composite index for the euro area rose from 52.8 in June. While last month’s reading fell short of the initial estimate, it was still close to the highest level in three years. Markit said the recovery in Italy also “remained solid” last month, with France remaining the euro area’s “laggard,” as a slight rebound in services was offset by a “deepening downturn” at manufacturers.
ECB officials will leave the benchmark rate at a record low of 0.15 percent when meeting in Frankfurt this week, according to a separate Bloomberg survey. The interest-rate decision is due on Aug. 7.