Investing.com - Economic activity in the euro zone fell less than expected in July, but still hit a one-and-a-half-year low, preliminary data showed on Friday.
In a report, market research group Markit said that its Flash Euro Zone Composite Output Index, which measures the combined output of both the manufacturing and service sectors dipped from 53.1 in June to 52.9 in July, above forecasts for 52.5.
The flash services purchasing managers’ index slipped to 52.7 this month, from June’s reading of 52.8 and better than expectations for a reading of 52.3.
The preliminary euro zone manufacturing purchasing managers’ index fell to a seasonally adjusted 51.9 this month from a final reading of 52.8 in June. Analysts had expected the index to fall to 52.9 in July.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Despite the drop, Markit noted that the overall pace of growth remained only slightly lower than the average seen so far this year and employment rose at the fastest rate for almost five-and-a-half years as companies boosted capacity in line with the overall upturn in the economy.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The eurozone economy showed surprising resilience in the face of the U.K.’s vote to leave the EU and another terrorist attack in France.”
Williamson added that the data suggested that the euro zone economy was growing at an annual rate of around 1.5%.
“Policymakers will be reassured by the resilience of the PMI in the immediate aftermath of the Brexit vote, but the fragility of the recovery leaves plenty of room for speculation about further stimulus later in the year,” Williamson concluded.
EUR/USD was at 1.1031 from around 1.1023 ahead of the release of the data, while EUR/GBP was at 0.8311 from 0.8324 earlier.
Meanwhile, European stock markets were lower. The Euro stoxx 50 fell 0.40%, Germany's DAX dropped 0.36%, France’s CAC 40 slumped 0.40%, while London’s FTSE 100 dipped 0.22%.