Growth in Europe’s two giant economies, Germany and France slowed significantly as manufacturing experienced a lack of demand, a growing supply chain and high cost spikes.
As the recovery from the easing of Covid-19 restrictions in the two countries faded, indicators of economic activity grew slower than expected in June.
In Germany, manufacturing activity fell to 52.0 from the previous reading of 54.8 in May, missing market expectations of 54.0. The services sector also declined to 52.4 in June from 55.0 in May, slipping from the projection of 54.6.
Services activity in France declined sharply to 54.4 from 58.3 previously recorded, while manufacturing declined to 51.0 from 54.6 in May.
Overall, the manufacturing sector in the European Zone declined to a 22 -month low of 52.0 in June, while services activity was the weakest since May 2021 with a record of 52.8.
The fall was due to a decline in production for the first time in two years and new orders for goods fell for two consecutive months.
Meanwhile in the UK, manufacturing activity also showed a decline from the previous reading, registering an increase of 53.4 from 54.6 in May.
The services sector was unchanged from the previous record in May with an increase of 53.4 and slightly better than expected to increase of 53.0 this month.
