Information and Communication Is the Only Euro Area Service Up More Than 0.5 Percent in June
Services production in the euro area fell 0.3 percent in June and 0.2 percent across the European Union, the statistical office said on Monday in its first estimate. Both areas are still 1.5 percent above June last year.
Six service activities are broken out. On the month, only one of them grew by more than half a percentage point.
One activity stands out
| June, month on month | Euro area | European Union |
|---|---|---|
| Information and communication | up 0.8 percent | up 0.7 percent |
| Transportation and storage | up 0.1 percent | unchanged |
| Accommodation and food services | up 0.1 percent | up 0.1 percent |
| Administrative and support services | down 0.4 percent | down 0.4 percent |
| Professional, scientific and technical | down 0.7 percent | down 0.7 percent |
| Real estate activities | down 1.0 percent | down 0.8 percent |
Calendar and seasonally adjusted, ranked by the euro area column. May was revised down to a 0.7 percent monthly rise from the 0.8 percent published on 7 August.
The same activity leads the annual comparison at 5.2 percent, against 3.0 percent for transportation and storage. It is running 3.7 percentage points above the sector’s own 1.5 percent annual rate on our calculation, and it is the only activity positive on both the monthly and the annual view by more than half a point.
The monthly and annual readings do not line up elsewhere. Professional, scientific and technical services fell 0.7 percent on the month but are still 0.8 percent higher than a year ago. Accommodation and food is the reverse, marginally positive at 0.1 percent on the month and down 1.4 percent on the year, the steepest annual decline of the six. Two activities are negative on both views: real estate, down 1.0 percent on the month and 0.3 percent on the year, and administrative and support services at 0.4 percent on both.
The country spread is far wider than the average
Luxembourg rose 7.8 percent on the month, Portugal 3.1 percent and Lithuania 2.6 percent. Latvia fell 3.7 percent, Germany 2.1 percent and Bulgaria 1.1 percent. The distance between the top and bottom readings is 11.5 percentage points on our calculation, against an aggregate that moved three tenths.
Germany matters because of its size rather than the size of its move: it fell 2.1 percent on the month, less than Latvia, and it is also negative on the year at 0.6 percent, one of only four member states in that position alongside Denmark at 6.5 percent, Italy at 0.5 percent and Austria at 0.1 percent. On the annual view Greece leads at 9.3 percent and Slovenia follows at 8.5 percent, with Estonia and Lithuania tied at 7.1 percent.
Ireland and Cyprus are confidential in this indicator and Portugal is confidential on the annual table, so three data points are absent from any country ranking built on this release. The release publishes no contribution weights, so it does not show how much any one country or activity moved the aggregate.
Why it matters: Services are the bulk of euro area output and a three tenths monthly fall is small, but the composition is not. One activity is growing by more than half a point, the two most sensitive to business investment decisions are both falling, and the largest member state is down on the month and on the year. The Governing Council meets on 10 September in Berlin.
Outlook: The next services production release is 7 October, covering July. Two things are worth watching: whether Germany’s decline extends, since a 2.1 percent monthly fall in the largest member state would weigh on the aggregate again if repeated, and whether information and communication keeps its 5.2 percent annual pace, because on this month’s numbers it is the only source of monthly growth above half a point.
Sources: Eurostat.
