Euro growth in slowdown
PRIVATE sector activity slowed in Europe and China this month just as the outlook for the US has darkened, according to data yesterday, which suggests a global slowdown is becoming more entrenched.
The Eurozone’s private sector grew only modestly — and without the support of Germany and France, it would have shrunk — while China’s factory sector barely expanded even as inflation eased, purchasing managers’ indexes (PMIs) showed.
Commercial sector activity fell to 53.6 in an initial “flash” PMI for June – a sharp drop from 55.8 the previous month.
All PMI scores above 50 indicate economic growth, yet the pan-Eurozone rating is slipping towards stagnation, printing its lowest rate since October 2009.
Factory activity in the single currency area fell to an 18-month low of 52 – another sharp drop, from 54.6.
The data come a day after the US Federal Reserve said the pace of recovery in the world’s largest economy was proceeding more slowly than it had expected, but pledged no new help for the economy once its bond purchase programme expires this month.
“Economic activity is losing momentum quite rapidly,” said Marco Valli at UniCredit. “The pace of growth deceleration in May-June matches similar evidence in other industrialised countries.”
China’s flash HSBC PMI, the earliest available indicator of the country’s industrial activity, eased to 50.1 in June. Data compiler Markit said this was consistent with second quarter economic growth of around 9.1-9.3 per cent year-on-year, down from 9.7 in the first quarter.