Eurozone purchasing index slows for second month in a row - survey

A key leading indicator of growth in the eurozone slowed for the second month in a row in June amid weaker exports, waning domestic demand and a slowdown in orders, a reference survey showed yesterday.

The purchasing managers' index compiled by data and research group Markit fell to 56 in June, confirming an earlier estimate, down slightly from May and the post-recession peak of 57.3 in April.

Any score above the 50-point line indicates economic growth. The index has been above that threshhold for 11 consecutive months now.

"The Eurozone PMI data indicate that growth in the region is likely to have peaked and the risks have increased of a further easing in coming months," said Markit chief economist Chris Williamson.

The main engine of the economic recovery, export growth "has weakened" and domestic demand "remains in the doldrums as economic stimulus measures are replaced by austerity," he said.

"The clearest indication of slower growth is provided by the inflows of new orders, which showed a renewed contraction in Spain and slowed to only modest rates in both Germany and Italy," Mr Williamson said. France was the only member of the common currency area to show any "resilience of demand," he added.

"Companies, especially in the periphery, need to regain confidence in the economic outlook if a further slowing in growth and even double-dip recessions for some countries are to be avoided," Mr Williamson warned.

In the service sector, the PMI dropped to 55.5 points in June from 56.2 in May. It was higher than Markit's previous estimate of 55.4 for June.