French business activity contracted further in June while Germany’s private sector continued to expand, further highlighting the divergence between the euro zone’s two largest economies.
In France, both the services and manufacturing sectors registered a slowdown amid weaker orders. Output and new orders in Germany remained strong.
The composite PMI for France, which includes the manufacturing and services sectors, fell to 48.0 from 49.3 in May. A figure below 50 signals contraction. The German composite index came in at 24.2, against 55.6 in May.
“The euro zone is still incredibly reliant on Germany,” Jeremy Stretch, head of FX Strategy at CIBC told CNBC.