At 4:00 am ET, Markit is slated to publish Eurozone flash PMI data for June. Along those lines, the Markit Flash Eurozone Composite PMI, which includes services, declined from 53.1 to 52.8, its lowest point since January 2015.
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Economists forecast that the purchasing manager’s index (PMI) rose to 50.9 from a final May reading of 50.7, according to Bloomberg. Economists surveyed by The Wall Street Journal last week had expected a more modest drop to 53.0.
“June’s survey data point to steady though disappointingly lackluster economic growth”, said Chris Williamson, Markit’s chief economist.
Stephen Brown, European economist at Capital Economics, said: “Overall, the drop in eurozone composite PMI to a 17-month low will be worrying news for policymakers ahead of tomorrow’s United Kingdom referendum result”.
Of concern to policymakers at the European Central Bank, companies cut prices at a slightly sharper rate this month. In May, growth fell to a six-and-a-half-year low. The output price index fell further below the 50 mark that separates growth from contraction, coming in at 49.2.
The manufacturing sector “still looks to have acted as a drag on the economy in the second quarter, leaving the economy reliant on the service sector and consumers in particular to drive growth”, he added.
Germany’s economy grew by 0.7 percent in the first quarter, buoyed by higher state and household spending. Business expectations in the service sector slipped to an 11-month low across the region in June, with companies often citing worries about political change and rising economic uncertainty, albeit with few explicit references to a potential “Brexit”.
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Higher output provided a boost to the headline index alongside faster growth in new orders and employment. Firms took on additional staff at the fastest rate seen so far this year in order to expand capacity to meet demand.
