Eurozone activity contracts again in June as services sector weakens

Business activity across the euro area fell again in June, marking a second straight month of contraction as weakness in the services sector broadened, according to a closely watched private-sector survey released on Friday.

The latest reading points to a deteriorating outlook for the region’s economy, with services — the bloc’s largest sector — losing momentum and dragging overall performance lower. Analysts watch the survey closely for early signs of change in demand, hiring and business confidence before official economic data are published.

The soft patch adds pressure on policymakers at the European Central Bank, which has been balancing slower growth against the need to keep inflation under control. Persistent weakness in the services industry could complicate the recovery if it continues into the summer.

While the survey does not measure output as precisely as official statistics, it is often used as a timely indicator of underlying trends. June’s figures suggest the eurozone remains vulnerable to sluggish demand and uneven growth across member states.