Eurozone PMI


After an 11-month high in March, PMI drops in April

According to the flash composite Purchasing Managing Index elaborated by Markit, the Eurozone economic recovery is showing signs of weakness. The PMI Composite Output fell from a revised 54.0 in March (previously reported: 54.1) to 53.5 in April. The reading also surprised markets on the downside, as they had expected the indicator to rise to 54.4. The indicator fell to a two-month low in April after it reached its highest peak in 11 months in March. Despite the fall, the index continues to linger above the 50-threshold that indicates expansion in business activity within the Eurozone private sector.

The moderation observed in April reflected, according to Markit, that, “the manufacturing and service sectors continued to expand, but saw rates of expansion cool compared to their ten- and eight-month respective highs in March.” Moreover, new business in services continued to rise in April, whereas growth in new orders moderated over the previous month. Meanwhile, employment grew in April in both the manufacturing sector and services.

At a country level, the slowdown was the result of weaker readings in Germany and France, which were mitigated by an overall acceleration of growth in the rest of the common-currency area.

Markit concluded that, “[t]he weaker rate of expansion is a big disappointment, given widespread expectations that the ECB’s quantitative easing will have boosted the fledgling recovery seen at the start of the year.” Markit added, “[h]owever, it’s too early to draw firm conclusions about whether growth is faltering again and the effectiveness of policy.”

FocusEconomics Consensus Forecast panelists expect the economy to expand 1.1% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, panelists expect the economy to expand 1.5%.


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Eurozone PMI Chart

Euro PMI April 2015

Note: Markit Purchasing Managers’ Index (PMI) Composite Output. A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction
Source: Markit

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