Chris Williamson of S&P Global called the figures “worrying” because the euro zone’s flash composite PMI fell to 50.3 in June.
The largest economy in Europe, according to earlier figures from Germany and France, was slowing rapidly.
Following the announcement of the German and French figures, bond rates in the euro zone decreased.
According to preliminary data released on Friday, the expansion of business activity in Europe slowed in June, portending a challenging conclusion to the second quarter.
The flash composite Purchasing Managers’ Index for the euro zone decreased from 52.8 in May to 50.3 in June. This fell short of the analysts’ prediction of 52.5. A reading over 50 indicates increased activity, while one under 50 indicates decreased activity.
According to the latest HCOB flash PMI survey data released by S&P Global, “Eurozone business output growth came close to stalling in June, pointing to renewed weakness in the economy after the brief growth revival recorded in the spring,” the company said in a release.
“Although concerns about the energy and supply chains have subsided since late last year, June has seen a further rise in worries about demand growth, specifically the effects of higher interest rates and the potential for recessions in both domestic and international markets.”
Speaking to CNBC’s Street Signs Europe, Chris Williamson, chief business economist at S&P Global Market Intelligence, described the numbers as “worrying.”
The cost of living increase and higher interest rates are starting to have an impact, he said.
The European Central Bank has been increasing interest rates consistently for the past 12 months in an effort to bring down inflation. Higher rates can lead to higher costs for companies across the bloc, however, and so often become a drag on output.
For the past year, the European Central Bank has steadily raised interest rates in an effort to reduce inflation. However, increased rates can result in greater expenses for businesses throughout the bloc, which frequently has an adverse effect on output.
“These data are consistent with our view that GDP (gross domestic product) growth in Germany will remain subdued in the second and third quarters after the economy registered a technical recession,” Claus Vistesen, chief economist for the euro zone at Pantheon Macroeconomics, wrote in a note to clients.