A slowdown in euro zone business growth at the start of the second half of 2017 could put paid to expectations of a stimulus clawback by the European Central Bank later this year. Laura Frykberg reports.
Business is still booming in the euro zone.. But not quite at the same pace. July's Markit PMI fell to 55.8 from last month's 56.3. Still above the 50 level, separating growth from contraction. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "I think that over the course of the next few weeks and months European central banks in particular will be extremely cautious. But I think it's fair to say that you know even if we get some moderation of growth we're still far away from the kind of crisis conditions that prevailed in 2008 2009." The large manufacturing economies missed expectations in July. With French business activity slowing to a six-month low. And Germany's private sector also stalling. PMI's show it falling to a six month low to 55.1 in July. Suggesting the euro zone's savior has come from elsewhere. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "Let's not forget that the euro zone economy is more than just manufacturing it's about services it's about domestic demand. And we are seeing some indications that domestic activity is beginning to recover. So I guess that should offset any weakness that we might anticipate on the manufacturing side." That domestic demand has led to a more positive IMF forecast.. Predicting stronger than expected euro zone growth in 2018. A more valuable euro could hinder exports though. The currency hitting a 23-month high on Monday, against an ailing dollar.