Eurozone PMI Services was finalized at 54.7 in July, up from June’s 48.3. PMI Composite was finalized at 54.9, up from June’s 48.5. That’s also the highest level since June 2018.

Looking at some member states, France PMI Composite hit 29-month high of 57.3. Germany hit 23-month high of 55.3. Spain hit 15-month high at 52.8. Italy hit 24-month high of 52.5.

Chris Williamson, Chief Business Economist at IHS Markit said: “Combined with a surge in manufacturing production, the renewed expansion of the service sector bodes well for the economy to rebound in the third quarter after the unprecedented slump seen in the second quarter. Whether the recovery can be sustained will be determined first and foremost by virus case numbers, and the recent signs of a resurgence pose a particular risk to many parts of the service sector, such as travel, tourism and hospitality.

“However, even without a significant increase in infections, social distancing measures will need to be in place until an effective treatment or vaccine is available, dampening the ability of many firms to operate at anything like pre-pandemic capacity, and representing a major constraint on longer-run economic recovery prospects.”

Full release here.

Eurozone PMI Manufacturing is finalized at 51.8 in July, up from April’s 47.4. It’s also the first growth reading in a year-and-a-half with demand continued to recovery with further easing of coronavirus restrictions. Growth was widespread too, with all market groups registering above 50 readings.

Looking at some member states, Spain hit 27-month at 53.5. Austria hit 19-month high 52.8. France hit 22-month high at 52.4. Italy hit 25-month high at 51.9. Germany also hit 19-month high at 51.0. But Greece and the Netherlands stayed in contraction at 48.6 and 47.9 respectively.

Chris Williamson, Chief Business Economist at IHS Markit said: “Eurozone factories reported a very positive start to the third quarter, with production growing at the fastest rate for over two years, fuelled by an encouraging surge in demand. Growth of new orders in fact outpaced production, hinting strongly that August should see further output gains…

“Increased unemployment, job insecurity, second waves of virus infections and ongoing social distancing measures will inevitably restrain the recovery. The next few months numbers will therefore be all important in assessing whether the recent uplift in demand can be sustained, helping firms recover lost production and alleviating some of the need for further cost cutting going forward.”

Full release here.