Eurozone: Composite PMI eases in June, but points to best quarter in over six years in Q2
June 23, 2017
Leading data suggest that the Euro area’s economic recovery softened somewhat in June, but remained on track for the best quarter in over six years in Q2. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 55.7 in June, down from May’s 56.8 and a five-month low. The result undershot market analysts’ expectations of a softer dip to 56.6. Despite June’s lower reading, the composite PMI averaged 56.4 in Q2, the best reading seen since Q1 2011 as momentum firms in the Eurozone.
June’s moderation reflected slower service sector growth, which expanded at the softest pace in five months. New orders also lost steam, while export growth was robust in part thanks to a weaker euro. Jobs were added at a buoyant pace in June, reflecting elevated optimism among firms and an improving economic climate. Meanwhile, input cost inflation waned to a seven-month low, largely due to lower prices for some commodities.
Regarding the two largest Eurozone economies, slower growth was seen in France and Germany, chiefly due to slower service sector activity. Elsewhere in the region, economic momentum also waned, but was healthy overall.