Composite PMI dips lower on weak export orders in March
Leading indicators point to a lackluster quarter for the Euro area’s economy. In March, the Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, fell to 51.3 points from February’s 51.9 points. It marked one of the worst readings of the past five years, but remained just above the 50-point threshold that distinguishes expanding business activity in the Eurozone.
Manufacturers reported the steepest downturn in six years as losses in output and new orders racked up. In line with the year’s rocky start, employment stagnated in the manufacturing sector. Meanwhile, the services sector reported marginal gains as new orders rose; export orders, however, plunged. In turn, hiring slowed. Optimism, for its part, slipped across sectors amid widespread concerns over a cool-off in the Eurozone, as well as over looming trade conflicts and Brexit.
Regarding the Eurozone’s two largest economies, Germany’s composite index revealed a further divergence between its manufacturing and services sectors—the manufacturing sector’s downturn worsened, while services-sector activity remained upbeat. On the other hand, France’s composite index proved February’s rebound to be a one-off as new orders dried up. Elsewhere in the region, robust services-sector activity offset stagnating manufacturing-sector output.