The euro zone services sector contracted at a slower pace in June, providing a stabilising signal for the broader economy after two months of deterioration.
The deceleration in the downturn was driven by a sharp fall in cost pressures, which declined at the fastest rate recorded outside of pandemic-era lockdowns.
This development marks a shift in the trajectory of private sector activity, which had been contracting for a third consecutive month.
While the services industry remains in contraction territory, the easing of input costs suggests that the pressure on margins and pricing power may be alleviating, potentially supporting a more stable economic footing in the coming quarter.
The data adds nuance to the global growth picture, arriving alongside signs of recovery in other major economies.
China’s official manufacturing PMI rose to 50.3 in June, up from 50.0 in May, indicating a return to growth in the industrial sector after a period of stagnation.