LONDON (Reuters) – Growth in euro zone private sector activity slowed in July as weak expansion in the services sector failed to offset a sharper slowdown in manufacturing, the final results of the HCOB/S&P Global purchasing managers’ survey showed on Monday.

The composite indicator fell to 50.2 in July, compared to 50.9 in June and 50.1 given in the first estimate. Even if this indicator is below the “flash” estimate, this is its fifth consecutive month that it has been in positive territory, since the 50 mark separates growth and contraction in activity.

“The eurozone economy is growing at a snail’s pace in July. At the sector level, services are not accelerating as they did at the beginning of the year, while the slowdown in industry continues unabated,” notes Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

The services PMI index fell from 52.8 in June to 51.9 in July, in line with the preliminary estimate.

The manufacturing PMI, released last week, showed that activity in the sector remained mired in contraction territory amid widespread distress, with output shrinking at its fastest pace since the start of the year.

This suggests that there will be no immediate recovery, as overall demand in the euro area declined in July for the second consecutive month and at a faster pace than in June. The composite index of new orders fell to 49.0 from 49.4 in June.

The decline came despite corporate prices rising at a slower pace in July than in June. Services inflation, a closely watched measure by the European Central Bank (ECB), actually moderated, with the sector’s producer price index falling to 52.9 from 53.5.

This inflation is now at its lowest since May 2021 and this could provide the ECB with more room to ease its monetary policy.

(Reporting by Jonathan Cable; by Claude Chendjou, edited by Blandine Hénault)

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