Euro zone business activity returned to modest growth in July: PMI

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Euro zone business activity returned to modest growth as some social restrictions ease

LONDON - Euro zone business activity returned to modest growth in July as some curbs imposed to stop the spread of the coronavirus were lifted, but the rebound in the bloc’s dominant service industry was not as sharp as expected, a survey showed.

Wednesday’s final Composite Purchasing Managers’ Index from IHS Markit, seen as a good indicator of economic health, bounced to 54.9 in July from June’s 48.5, ahead of the 54.8 flash estimate. It had been below the 50 level separating growth from contraction for four months. Overall demand increased and optimism improved but - likely of concern to policymakers - firms again cut headcount sharply. The employment index held below breakeven at 46.5, albeit better than June’s 43.2 reading.

 

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