Flash Services PMIs Slump in EZ, UK Sees Robust June
EUROPEAN DATA
MNI (London)
EUROZONE FLASH JUNE SERVICES PMI 52.8 (FCST 55.5); MAY 56.1
UK FLASH JUNE SERVICES PMI 53.4 (FCST 52.9); MAY 53.4
- Eurozone service PMIs slipped in the June flash, with substantial falls seen notable for France (-3.9 points), Germany (-2.6) and the Eurozone aggregate (-3.3), all dipping 2.1-3.1 points lower than forecasted. The UK saw services stable at 53.4, a small surprise on the anticipated 0.5-point decline. Across the board, high inflation saw consumer demand weaken.
- Despite the falls, the service industries proved to be more robust than manufacturing, where PMIs dived to close to two-year lows. France's 5-month low saw some further expansion of activity and continued hiring however added overall economic uncertainty dampened growth outlooks.
- Germany also saw services at a 5-month low in the flash PMI, as demand weakened due to the inflation squeeze on consumers' disposable incomes. Labour shortages began to appear, hinting at further tightness of the German labour market. Service sector running costs saw a record increase as increased wage pressures intensified, along with financing costs.
- Eurozone services cooled in June, with a notable slowing of overall jobs growth to a 13-month low, as the industry priced in higher recession risks into expansion plans. Some moderation of selling prices was seen in both services and manufacturing.
- The UK's unchanged services PMI highlighted resilience in June, with events such as the Platinum Jubilee boosting consumer-facing service demand for the month. This spilled over into accelerated hiring in the sector and rising wages as filling positions remained challenging.
Source: MNI / Bloomberg
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