Euro Zone Business Activity Reaches Eight-Month High

The euro zone economy has shown signs of recovery in July, with business activity reaching an eight-month high. The S&P Global Euro Zone Composite PMI rose to 52.0, above the neutral mark of 50.0 and signaling growth in activity.

This increase was driven by a rebound in services, which climbed to a five-month high of 51.7. New orders also rose at their fastest pace since November, with a slight pick-up in factory order growth and a strong recovery in services new business.

Germany and Italy saw stronger growth, while Spain posted its best performance in over a year and a half. France remained an outlier, however, as activity continued to contract.

The uncertainty surrounding the Middle East conflict continues to cloud the outlook, with input cost inflation easing to a five-month low but remaining elevated relative to historical survey averages.