BRUESSLES (Euronews) - Eurozone business activity stalled in June, with PMI data showing flat growth linked to weak services and manufacturing. Germany improved slightly, while France declined. Persistent service-sector cost pressures and renewed energy concerns may cloud ECB rate cut prospects.
Private sector activity across the eurozone showed little sign of progress in June, with the latest Purchasing Managers’ Index (PMI) data highlighting stagnation in both services and manufacturing, casting a shadow over the region’s economic recovery.
The flash eurozone Composite PMI for June remained at 50.2 points, unchanged from May and narrowly above the 50-point threshold that separates expansion from contraction. The figure came in slightly below market expectations of 50.5.
The services PMI edged up as expected to 50 from 49.7, while the manufacturing PMI was unchanged at 49.4, missing forecasts of a rise to 49.8.
“The eurozone economy is struggling to gain momentum,” said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.
“For six months now, growth has been minimal, with activity in the service sector stagnating and manufacturing output rising only moderately.”
The subdued business activity persists despite a more accommodative monetary stance by the European Central Bank (ECB), which has again reduced its deposit facility rate by 25 basis points to 2.00%.
Germany, the bloc’s largest economy, posted a marginal return to growth. The flash composite PMI rose to 50.4 in June from 48.5 in May, buoyed by demand in the manufacturing sector, which saw the fastest rise in new orders in over three years.
“There is a decent chance Germany could finally break out of the frustrating stop-start growth pattern it’s been stuck in for the past two years,” said de la Rubia, citing the positive trend in output and support from expansionary fiscal policies.
The German services PMI rose to 49.4 in June 2025 from 47.1 in May, surpassing market expectations of 47.5. The data signalled only a slight decline in activity, marking the mildest contraction since the current three-month downturn began.
Conversely, France continued its downward trajectory. The composite PMI dropped to 48.5 in June from 49.3 in May, marking the tenth consecutive monthly decline.
Both manufacturing and services contracted, with firms citing subdued domestic demand, intensifying international competition, and uncertainty surrounding global trade.
Overall sales fell for the thirteenth consecutive month in June, with the pace of decline quickening slightly from May. The sharper downturn was driven by the steepest drop in factory orders since February.