According to final data released today by IHS Markit, a global information provider based in London, Eurozone's Services Purchasing Managers' Index (PMI) rose 2.5 percent in July compared to the previous month and reached 59.8 points, slightly below market expectations of 60.4.



In the service sector, which is the engine of Eurozone economy, the main components that led to the strongest growth in more than 15 years were the fastest increase in new orders and the rise of private sector production during the pandemic period.

As a result of the steep growth in new business areas during this period, business capacities across the region were largely strained. However, significant increases in output potential were observed and the employment grew at the fastest rate in almost 21 years. But input costs rose at their strongest rate since September 2000, pointing to inflationary pressures. In addition, when the region's four largest economies were taken into scale, the fastest service sector expansion occurred in Germany, while the lowest growth was observed in Italy.
On the other side, there is a downside risk for the service sector, as calls for restrictive measures are increasing as a result of the rapid increase of cases due to the Delta variant. In this sense, optimistic expectations can be rasped through the business community, and it seems likely that rising input costs will increase the consumer inflation.