Economic activity in the eurozone economy contracted more sharply in July. Business is terrible in the industrial sector due to falling orders and reduced production, according to preliminary figures from market researcher S&P Global.
S&P Global, therefore, speaks of a weak start to the third quarter for the euro area economy. The research firm says that the indicators for the future point to an even more muscular contraction in the coming months. As a result, companies will be more cautious about hiring new staff.
The S&P Global index, which measures overall activity in the euro area, fell to 48.9 in July from 49.9 a month earlier. This means the purchasing managers index has fallen to its lowest level in eight months. A level of 50 or more indicates growth; below that, contraction.
The industrial gauge went to a level of 42.7, the lowest point in 38 months, according to S&P Global. Due to the uncertain economy, industrial companies receive fewer new orders. S&P Global says the industry is the “Achilles’ heel” of the eurozone economy.
There is still growth in the services sector, including catering, retail and tourism, for example, but less than before. That index went to 51.1, the lowest level in six months.
S&P Global also reported separate figures for Germany and France, the largest economies in the euro bloc. The purchasing managers index for Germany fell to 48.3, the lowest level this year. That for France went to 46.6, the lowest point in 38 months.
In the United Kingdom, economic activity was still barely growing, with an index reading of 50.7. But that is the lowest level in six months, according to S&P Global.
