Eurozone: Flash PMI disappoints, signaling moderating recovery
August 21, 2014
The flash estimate of the Markit Eurozone PMI Composite Output Index came in at 52.8 in August. The result was down from both the revised 53.8 recorded in July (previously reported: 54.0) and the 53.4 that market analysts expected. The composite PMI—the result of a survey of over 5,000 manufacturing and services businesses—lost the ground recovered in July and reverted to the level recorded in June, the lowest level since the beginning of the year. That said, since July of last year the index has been above the 50-threshold that signals a stable economic outlook.
The August moderation was underpinned by declines in both the manufacturing and in the services sector. In particular, the index for manufacturing moderated to the lowest level in more than a year. Against this backdrop, Markit reports that, “August saw job creation slow to near-stagnation,” although this represents an improvement over the job losses recorded during this time last year.
At a country level, Germany’s composite PMI slowed from a revised 55.7 in July (previously reported: 55.9) to 54.9 in August. Despite the slowdown, the result marked the sixteenth consecutive month of PMI in expansionary territory. France’s composite PMI rose from 49.4 in July to 50.0 in August, resting in neutral territory following three consecutive below-50 readings. Meanwhile, the composite PMI for all the other countries in the region slowed to the lowest level since the beginning of the year, although remaining above the 50-threshold for a thirteenth successive month.
Author: Armando Ciccarelli, Head of Data Solutions