Eurozone growth slows as worries mount over trade

EUROZONE growth cooled in July, thanks to a weaker services sector and fears about trade, a survey reveals.

Future expectations of business activity slipped to a 20-month low in the Purchasing Managers’ Index, which fell from 54.9 in June to 54.3 in July. A figure above 50 signals growth in the economy, while one below 50 suggests that it has contracted.

The fall was driven by a drop in the services PMI from 55.2 to 54.4 in July – the second lowest reading since Nov 2016. Movements in the figures compiled by IHS Markit from surveys of around 5,000 companies across the zone often precede those in GDP.

The manufacturing PMI increased slightly to 55.1 from 54.9 in June but both manufacturing and services reported the smallest increases in new orders since Oct 2016, suggesting that growth could slow again in August.

Chris Williamson, of IHS Markit, said: “A worsening picture for export growth is clearly having a detrimental effect on manufacturing.”