The eurozone private sector posted a sixth consecutive month of increased output in June, and a fourth consecutive monthly increase in employment. Growth rates remained weak in both cases, "but the ongoing decline in new orders has shown signs of ending and the 12-month outlook is the strongest in almost a year," according to the Hamburg Commercial Bank survey of corporate purchasing managers' expectations for S&P Global.

Factor price inflation remained weaker than the survey's long-term average, unchanged from a six-month low in May, while euro area goods and services prices rose at a faster rate of around 20%, the report said.

The seasonally adjusted HCOB Eurozone Composite PMI, the Eurozone services PMI for June 2025, strengthened to 50.5 from 50 in the flash estimate and still above the 49.7 in May. In parallel, the HCOB Eurozone Composite PMI, the composite PMI, rose to 50.6 from 50.2 (and compared to 50.2 in the flash estimate). "Although the latest reading indicates only marginal overall growth, it was the highest in the last three months and above the 12-month average," the report highlights. The index remains above the critical threshold of 50 points that separates a phase of contraction from one of expansion.

Both manufacturing and services (transport, food, tourism, trade) recorded output increases. Among the five euro area economies for which manufacturing and services data are available, Ireland led the growth rankings for the fourth consecutive month, "although the pace of expansion fell to its slowest since January". Spain regained second place from Italy with a faster expansion. The Italian economy expanded for the fifth consecutive month, "although at the weakest pace since March". Germany returned to growth with its fifth increase in output in 2025, although at a weak pace. France remained the rear-end, with activity declining for the tenth consecutive month, although marginally.

June survey data signaled a further recovery in business confidence from an 18-month low in April, reaching the highest level since July 2024. Expectations improved among both manufacturers and service providers.

Price inflation remained unchanged from the six-month low in May and below its long-term average, reflecting a further decline in producer costs, while service providers continued to post relatively high increases. Similarly, output prices fell, while service providers increased their rates at a rate that remained above their long-term average.

Commenting on the PMI data, Cyrus de la Rubia , Chief Economist at Hamburg Commercial Bank, said: "The service sector has been more or less stagnant since April. A look at the longer-term trend reveals that the average pace of growth recorded since the summer of 2021 is below the average of the full PMI survey. This marks a prolonged period of relatively weak growth, which has never been surpassed in 27 years of PMI data: the last two recessions in the service sector, due to the financial market crisis of 2008/2009 and the euro crisis of 2012, followed relatively rapid growth and are unlikely to be repeated. Private consumption, the main growth signal for the service sector, has not collapsed massively since 2021. In June, companies even hired more people than in May, and a recession can therefore be avoided in the foreseeable future."

"The question is whether a robust recovery is possible after the weakness of the services sector in recent years, " de la Rubia added. "This will probably be difficult for the eurozone as a whole, but in Germany, the eurozone's largest economy, it is certainly a likely outcome, given the extraordinary stimulus package the new government is implementing: the fiscal stimulus is likely to extend to the services sector, especially in the coming year. In any case, expectations for the next 12 months have improved for the eurozone, even if the figure remains below the long-term average. In light of other factors, such as the strong euro and the deflationary effect of US tariffs on the eurozone, the importance of services inflation, which seemed more critical a year ago, is fading."