Euro region grows at slowest pace in 6 months as manufacturing cools

Bloomberg

Growth in the euro-region economy started the third quarter at the weakest pace in six months as manufacturing cooled.
A composite Purchasing Managers’ Index fell to 55.8 in July from 56.3 in June, IHS Markit said on Monday. The figures indicate that gross domestic product is
expanding at a 0.6 percent quarterly pace, compared with 0.7 percent in the second three months of the year.
European Central Bank President Mario Draghi said last week that that the region isn’t yet ready for a reduction in the unprecedented stimulus. While growth appears to be firming, prices aren’t picking up fast enough to get to the ECB’s target without help from record low interest rates and
continued bond buying.
“The eurozone’s recent growth spurt lost momentum for a second month, but still remained impressive,” said Chris Williamson, chief business economist at IHS Markit. It “adds to the belief that ECB policy makers are in no rush to taper.”
Increases in manufacturing costs are starting to slow, with the rise in input costs the lowest since November, Monday’s report showed. Growth in new orders and employment is still strong. Earlier reports showed that French and German economies lost some momentum this month.

FRENCH GROWTH SLOWS
France’s private-sector economy slowed in July as the best manufacturing numbers in more than six years couldn’t compensate for a weakening in services.
A composite Purchasing Managers’ Index fell to 55.7 from 56.6 in June, IHS Markit Economics said on Monday. That’s worse than the 56.4 predicted by economists in a Bloomberg survey. While service growth retreated more than forecast, manufacturing unexpectedly increased, and all readings were well above the 50 mark the separates expansion from contraction.
“The French private sector continued to expand at a robust pace in July, despite losing a little
momentum from the previous quarter,” said Annabel Fiddes, an economist at IHS Markit. It “marks a solid start to the second half
of the year.”
German and euro-area PMI data are expected to be little changed when they are published at 9:30 a.m. and 10 a.m. Frankfurt time, respectively.