Purchasing managers index (PMI) for the manufacturing and services sectors in the Euro Area fell more than expected due to inflation.
While the European Central Bank is increasing interest rates for the first time in 11 years, inflation in the Euro Zone continues to have a negative impact on economic activity. Composite PMI in the Eurozone fell to 49.4 in July. Economists participating in the Bloomberg survey expected the index to be 51. The data showed that the composite index fell to its lowest level in 17 months.
Manufacturing PMI fell to 49.6, below expectations of 51. Services sector PMI was also below expectations with 50.6. Signals from the two major economies of the region also revealed the negative picture in activity. Manufacturing PMI in Germany fell to 49.2 in July. The expectation was that the index would fall to 50.7. While the services sector PMI fell to 49.2 in the country, the composite PMI was also below expectations with 48. Manufacturing PMI in France also fell to 49.6 in July.
