Eurozone PMI June 2016

Eurozone

Eurozone: Composite PMI inches down to 17-month low

June 23, 2016

Recent data suggest that business activity in the Euro area slightly lost momentum in June. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), elaborated by Markit, inched down from 52.9 in May to 52.8 in June. The result overshot market analysts’ expectations of a starker fall to a 52.6 reading and marked the lowest reading since January 2015.

The fall in June reflected a downturn in services growth while conditions in the manufacturing sector improved. New business orders slowed in the services sector, however, picked-up in the manufacturing sector. Business expectations among service providers fell to an almost year low amid rising political and economic uncertainty.

Regarding the two largest Eurozone economies, economic conditions improved in Germany but deteriorated marginally in France. Economic conditions elsewhere in the region edged up slightly from May.

The European Central Bank (ECB) expects the Eurozone economy to expand 1.7% in 2016 and to pick up further to 1.9% growth in 2017. FocusEconomics Consensus Forecast panelists expect the Eurozone economy to expand 1.6% in 2016, which is up 0.1 percentage points from last month’s forecast. For 2017, panelists expect the economy to also expand 1.6%.


Author: Angela Bouzanis, Senior Economist

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Euro PMI June 2016

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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