Eurozone July business activity holds up despite Greek crisis

Euro banknotes of various denominations are arranged for a photograph in London, U.K. Eurozone private sector business activity slowed in July but was holding up much better than expected against a “rollercoaster” Greek debt crisis. PHOTO: BLOOMB
Euro banknotes of various denominations are arranged for a photograph in London, U.K. Eurozone private sector business activity slowed in July but was holding up much better than expected against a “rollercoaster” Greek debt crisis. PHOTO: BLOOMBERG

BRUSSELS (AFP) - Eurozone private sector business activity slowed in July but was holding up much better than expected against a "rollercoaster" Greek debt crisis, a key survey showed Friday.

The closely watched Markit Economics Composite Purchasing Managers Output Index (PMI) for July slipped to 53.7 points from 54.2 in June when it hit a more than four-year high.

The July reading was still well above the 50-points boom-or-bust line and showed the 19-nation single currency bloc "remained reassuringly robust". The eurozone has been recovering steadily but modestly for the past 18 months amid fears Greece could crash out of the bloc and undercut both consumer and business confidence.

But Markit chief economist Chris Williamson said the report showed "economic growth lost only slight momentum in July amid the rollercoaster events of the Greek debt crisis." "The rate of expansion remained reassuringly robust to suggest that it was by-and-large 'business-as-usual' for the region as a whole," Williamson said.

The figures suggest the economy grew 0.4 percent in the three months to June and maintained that rate into July, he added.

Mr Williamson said "recent positive developments in relation to Greece suggest the pace of growth could pick up again in coming months."

The eurozone economy grew 0.4 per cent in the first quarter of 2015.

Markit said its PMI index for the services sector - which accounts for about two-thirds of all activity in a developed economy - fell to 53.8 points in July from 54.4 in June, with manufacturing little changed.

Analysts said the report was positive overall and the prospect of agreeing a new debt rescue for Greece in coming weeks should support growth.

"Hopefully, the reaching of a deal for Greece will help the eurozone's recovery to kick on, although Greece is by no means out of the woods and a lot could yet go wrong," said Howard Archer at IHS global Insight.