LONDON, July 5 Reuters Business growth across the euro zone slowed further last month, according to a survey in which forward looking indicators suggested the region could slip into decline this quarter as the cost of living crisis keeps consumers wary.

SP Global39;s final composite Purchasing Managers39; Index PMI, seen as a good guide to economic health, fell to a 16month low of 52.0 in June from May39;s 54.8, just ahead of a preliminary 51.9 estimate. Anything above 50 indicates growth.

The sharp deterioration in the rate of growth of euro zone business activity raises the risk of the region slipping into economic decline in the third quarter, said Chris Williamson, chief business economist at SP Global.

The manufacturing sector is already in decline, for the first time in two years, and the service sector has suffered a marked loss of growth momentum amid the cost of living crisis. Household spending on nonessential goods and services has come under particular pressure due to soaring prices.

A PMI covering the bloc39;s dominant services industry sank to 53.0 from 56.1, albeit just above the flash 52.8 estimate. A factory PMI released last week showed manufacturing production fell in June for the first time since the initial wave of the coronavirus pandemic two years ago.

Meanwhile, although inflationary pressures moderated somewhat last month, the services output prices index remained near a record high at 63.2, down from May39;s 64.6.

Inflation in the bloc…