Eurozone recovery losing momentum, PMI survey suggests

image copyrightReuters
image captionGrowth was uneven across eurozone countries, with Germany "robust" and France losing ground

Economic activity in the eurozone slowed in June to its weakest rate in six months, a survey has suggested.

The Markit Purchasing Managers' Index (PMI) for private sector activity, fell to 52.8 in June from 53.5 in May. A figure above 50 indicates growth.

Overall, the signs point to a recovery in the eurozone "losing momentum", research firm Markit said.

It said growth was uneven, with "robust" activity in Germany but a worsening downturn in France.

"The big concern is once again the divergent trends within the eurozone," said Markit chief economist Chris Williamson.

Germany's economy is set to grow by 0.7% in the second quarter, in marked contrast to France, where an economic slowdown continues, Markit said.

"Although the survey suggests the eurozone as a whole should grow by at least 0.4% in the second quarter, France appears to be entering a renewed downturn after GDP stagnated in the first quarter," said Mr Williamson

Businesses continued to cut prices to boost sales in June, but were squeezed by factors such as rising oil prices, the survey found.

However, manufacturing and services output rose for the 12th month running.

Rising orders in the services sector may also help to revive growth in the eurozone, Mr Williamson added.

The rate of economic recovery in the eurozone has been a concern for the International Monetary Fund (IMF), which last week said that the recovery had not been strong enough.

At the beginning of June, the European Central Bank introduced a raft of measures aimed at stimulating the eurozone economy, including negative interest rates and cheap long-term loans to banks.

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