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The Eurozone manufacturing sector accelerated its pace of expansion in the month of July, the latest manufacturing activity survey from IHS/Markit research showed.

The Eurozone manufacturing purchasing managers index (PMI) rose to 55.1 in July while services PMI dropped sharply to 54.4 versus 55.2 last.

The IHS Markit Eurozone PMI Composite fell from 54.9 in June to 54.3 in July, hitting fresh 2-month lows.

Comments from  Chris Williamson, Chief Business Economist at IHS Markit:

“The flash PMI suggests the Eurozone started the second half of the year on a relatively soft footing, indicative of GDP growth slowing in the third quarter. The July reading is consistent with quarterly GDP growth of 0.4%, down from a 0.5% expansion indicated by the surveys for the second quarter.”

“The renewed slowdown comes as a disappointment, confirming suspicions that June’s rebound was temporary, largely due to businesses in some countries making up for an unusually high number of public holidays in May.”

“Given the waning growth of new business and a further slide in business optimism, the outlook has also deteriorated, notably in manufacturing, where the surveys saw worries about trade wars intensify markedly in July.”