Europe’s economy was supposed to keep shrinking. It didn’t.
The S&P Global Flash Eurozone Composite PMI rose to 49.5 in June from 48.5 in May, beating the consensus forecast of 49.1. That’s still below the 50 threshold that separates contraction from expansion. But in an environment where traders were bracing for worse, “not as bad as expected” functions as good news.
The numbers behind the stabilization
The services business activity index climbed to 48.9 from 47.7 in May, hitting its highest level in three months. The pace of decline slowed meaningfully, and there were even minor employment gains.
Manufacturing told a different story, but a relatively encouraging one. The manufacturing PMI held above 50, coming in around 51.2 to 51.3. Supply chain disruptions tied to geopolitical tensions in the Middle East weighed on output.
