Eurozone business activity shrinks again as June PMI slips to 49.5

Eurozone business activity contracted for a second straight month in June, signaling renewed pressure on the bloc’s economy. The HCOB Flash Eurozone Composite Purchasing Managers’ Index fell to 49.5, below the 50-point threshold that separates expansion from contraction.

The latest reading suggests both services and manufacturing lost momentum at the end of the second quarter. Economists watch the PMI closely because it offers an early snapshot of private-sector demand, hiring, and business confidence across the currency union.

A second month of decline may add to concern among policymakers at the European Central Bank, which has been balancing weak growth against persistent inflation risks. For households and companies, the softer data points to a more fragile recovery than many had hoped for.

The June figures underscore how uneven the eurozone rebound remains, with businesses still facing subdued demand and cautious investment plans. Analysts will now look to upcoming inflation and output data for signs of whether the slowdown is temporary or the start of a broader stall.