The euro zone's services sector slid further into contraction in July, hitting a five-year low, while inflationary price pressures remained near record levels. Final data in the monthly PMI survey of private sector companies showed that of the big four economies in the euro zone, only in Germany did services activity expand, and in this case slightly more quickly than in June. The RBS/Markit Eurozone Purchasing Managers Index for services companies, which range from banks to cafes, fell to 48.3 in July from 49.1, unrevised from the flash estimate and well below the 50.0 mark that separates growth from contraction.
Germany fared a little better and remained in growth territory at 53.1, ticking up from June's 52.1.
"The final PMI data confirm a dramatic spreading of weakness throughout the euro area, with service sectors in France, Italy and Spain all contracting at or near to survey record rates," said Jacques Cailloux, chief euro area economist at data sponsor RBS. With confidence plummeting amid weaker growth of new business in Germany, the euro zone's largest national economy is also looking in danger of sliding into contraction soon,"
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