LONDON • Euro zone business activity picked up slightly last month but remained weak as a modest upturn in the services industry offset a continued deep downturn in factory output, a survey showed.
Worryingly for policymakers at the European Central Bank, who are under pressure to support growth, forward-looking indicators did not point to a bounce back and business expectations for the year ahead dropped.
IHS Markit's Euro Zone Composite Final Purchasing Managers' Index (PMI), considered a good measure of overall economic health, nudged up to 52.2 last month from May's 51.8. That was a touch higher than a preliminary reading of 52.1, but it stayed close to the 50 mark separating growth from contraction.
"The June PMI surveys indicate that the pace of euro zone economic growth picked up at the end of the second quarter, though it would be wrong to get overly excited by the upturn," said IHS Markit chief business economist Chris Williamson.
A PMI covering the euro zone's dominant services industry bounced to 53.6 from May's 52.9, helping to counteract a fifth month of contraction in manufacturing. Monday's factory PMI indicated there will be a slow start to the second half for manufacturers as new orders fell for a ninth month, stocks of raw materials were depleted again, backlogs of work were run down and headcount was reduced for a second month.