According to the report from IHS Markit, Eurozone PMI Composite Output Index slipped closer to the 50.0 no-change mark during July. Unchanged on the earlier flash reading, the index posted 51.5, a level indicative of only modest growth and down from June’s seven month high of 52.2.

The headline index continue to mask notable differing performances between the manufacturing and services economies. Whilst service sector activity rose at a solid, albeit slightly slower pace, there was a notable and accelerated fall in manufacturing production during July.

Weighing on the performance of the overall eurozone economy in July was ongoing weakness in demand. New work placed with private sector companies rose only slightly, weighed down in the main by another marked reduction in manufacturing order books. July marked a fifth successive monthly fall in backlogs, with the reduction the sharpest since April. Helping firms to keep on top of their workloads was another rise in employment, maintaining a trend that stretches back to November 2014. However, growth in staffing numbers was the weakest since April 2016. Hiring was also limited at a time of waning optimism about the future. Latest data showed that confidence was at its lowest level for just under five years.