Source: Sharecast
The flash reading of the S&P Global eurozone composite purchasing managers' index (PMI) jumped to 51.9 this month after coming in at the neutral, no-growth mark of 50.0 in June.
This was well above the pickup to 50.3 expected by economists and the highest reading since February.
The composite PMI is a weighted calculation of activity within the services and manufacturing sectors, both of which improved over the month.
The services PMI rose to a five-month high of 51.6 from 49.4, while the manufacturing PMI increased to a three-month high of 52.0 from 51.4, with the manufacturing output index at its highest since March 2022.
“July is seeing a welcome revival of economic activity in the eurozone, but a volatile geopolitical environment means it remains to be seen if the good news can last," said Chris Williamson, the chief business economist at S&P Global Market Intelligence.
“After a largely stagnant second quarter, there has been something of a bounce in demand during July which takes the PMI up to a level indicative of GDP growing at a reasonably solid 0.3% quarterly pace. This represents the best performance since the outbreak of the war in the Middle East with manufacturing enjoying its strongest growth spurt since early-2022 and services buoyed by a solid rebound in activity after three months of decline."
New orders increased for the first time in five months, registering its fastest growth – albeit marginal – since April 2023. While new export orders fell, the rate of decline was the least pronounced in over four years.
Overall optimism levels continued to recover from April's recent low, helped by slowing input cost inflation.
In terms of regional performances, Germany registered growth in overall business activity for the first time in four months, while French output fell marginally. However, the rest of the eurozone as a whole saw its strongest expansion in eight months.