Euro zone business activity turns positive in July

Business activity across the euro zone unexpectedly returned to growth in July, ending a four-month contraction streak and signaling a potential turning point for the region's economy. The preliminary, or flash, Composite Purchasing Managers' Index (PMI) rose to 51.9 in July from a neutral 50.0 in June, according to data released on July 24 by S&P Global. The figure significantly exceeded economists' forecasts and marks the first reading above the 50-point threshold that separates expansion from contraction since February.

The rebound was driven by a broad-based improvement, with both the services and manufacturing sectors contributing. The services PMI jumped to 51.6, snapping three months of decline, while the manufacturing PMI rose to 52.0, its highest level in over four years. A key driver was a revival in new orders, which grew for the first time since February at the fastest pace since April 2023. Export orders, though still declining, showed the slowest rate of decrease in over four years.

The recovery was evident in the bloc's largest economies. Germany's private sector returned to growth for the first time in four months, while France's downturn softened to its weakest...