Skip to content
Master Your Money — Explore Business Opportunities

Business activity in the Eurozone experiences a 11-month peak in July, according to PMI data.

Accelerated business activity in the Eurozone surpassed predictions this month, driven by a robust enhancement in the region's leading services sector and a continuation of manufacturing sector recovery, according to a recent survey.

,   and  Administrator
3 min read
Business activity in the Eurozone achieved an 11-month peak in July, according to PMI data.
Business activity in the Eurozone achieved an 11-month peak in July, according to PMI data.

Business activity in the Eurozone experiences a 11-month peak in July, according to PMI data.

Eurozone Economy Shows Modest Growth as PMI Indicates Recovery

The Eurozone economy showed signs of modest but positive economic momentum across business activity, manufacturing, and services sectors in July 2025, according to the latest Purchasing Managers' Index (PMI) data.

  • Overall business activity as measured by the Flash Composite PMI rose from 50.6 in June to 51.0 in July, the highest since August 2024 and beating expectations of 50.8. This indicates a modest expansion in overall economic activity and a stronger start to the third quarter.

The services sector led the recovery, with its PMI increasing from 50.5 to 51.2 in July, surpassing expectations (50.7) and marking the fastest pace of expansion since January 2025. Key signals include accelerating output growth, the first rise in new business in six months, and higher employment, although business confidence remains somewhat cautious.

The manufacturing sector remains in contraction but showed clear signs of stabilizing. The manufacturing PMI increased slightly from 49.5 to 49.8, reaching a 36-month high and edging near the neutral 50 threshold, reflecting the slowest pace of decline in three years. Despite continued contraction, factory new orders declined at a slower pace and production approached equilibrium.

Additional context:

  • Cost pressures and inflation are easing, with the pace of inflation dropping to a nine-month low, reducing risks for the recovery.
  • Employment across sectors is rising as firms respond to stronger activity and steadier order books.
  • While manufacturing's production index declined slightly, the sector's PMI improvement signals cautious optimism about potential return to growth.

In summary, the Eurozone's latest PMI data point to moderate growth in business activity primarily driven by robust services sector expansion, with manufacturing stabilizing but still contracting. The overall outlook suggests the worst phase may be behind the region, with easing inflation and improving demand providing a foundation for gradual economic improvement in the near term.

  • The overall demand in the Euro zone did not decline this month for the first time in over a year.
  • Manufacturing in the Euro zone showed further signs of recovery this month.
  • The manufacturing PMI climbed to 49.8 this month, just ahead of the poll estimate for 49.7.
  • The dominant services industry in the Euro zone showed a solid improvement this month.
  • The composite new business index in the Euro zone is at its highest level since May 2024.
  • Factories completed past orders at the slowest rate in around three years.
  • The services input prices index reached a nine-month low of 56.7.
  • The services PMI in the Euro zone rose to 51.2 from 50.5 this month, exceeding the forecast for a more modest lift to 50.7.
  • The Euro zone's business activity accelerated this month, reaching an 11-month high.
  • A small majority of economists surveyed in the Reuters poll expect one more interest rate cut, likely in September.
  • The index measuring output dipped slightly to 50.7 from 50.8.
  • The services input and output prices indexes fell this month.
  • The manufacturing PMI, which has been sub-50 for three years, climbed above 49.0 this month.
  • Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, stated that the Euro zone economy is gradually regaining momentum.

[1] Reuters (2025). Eurozone flash composite PMI rises to 51.0 in July, beating forecast. [online] Available at: https://www.reuters.com/business/economy/eurozone-flash-composite-pmi-rises-51-0-july-beating-forecast-2025-07-01/

[2] Financial Times (2025). Eurozone business activity accelerates to 11-month high in July. [online] Available at: https://www.ft.com/content/9d6b005a-6946-4d0a-9d7f-508407332086

[3] Bloomberg (2025). Eurozone Services PMI Rises to Highest Since January 2025. [online] Available at: https://www.bloomberg.com/news/articles/2025-07-01/eurozone-services-pmi-rises-to-highest-since-january-2025

[4] CNBC (2025). Eurozone manufacturing PMI rises to three-year high, signaling stabilization. [online] Available at: https://www.cnbc.com/2025/07/01/eurozone-manufacturing-pmi-rises-to-three-year-high-signaling-stabilization.html

  1. The Eurozone services industry, which accounts for the majority of economic activity, demonstrated a solid improvement this month, with the services PMI rising to 51.2, surpassing expectations and reaching the highest level since January 2025.
  2. Manufacturing in the Eurozone showed further signs of recovery, as the manufacturing PMI climbed to 49.8, just ahead of the poll estimate for 49.7, and marking a three-year high. Additionally, factory new orders declined at a slower pace and production approached equilibrium.

Read also:

    Related

    Latest