Eurozone: Flash PMI falls again in June
June 23, 2014
The flash estimate of the Markit Eurozone PMI Composite Output Index came in at 52.8 in June. The result was down from the 53.9 recorded in May and undershot the 53.4 market analysts expected. The composite PMI—the result of a survey of over 5,000 manufacturing and services businesses—has been above the 50-threshold that signals a stable economic outlook since July of last year, yet June’s reading marked the lowest level in six months, which suggests that the pace of the region’s recovery is slowing down.
The slowdown was underlined by weakness in the manufacturing component, which expanded at the lowest pace in seven months, as well as in the services sector. Although both sectors expanded capacity by taking on more staff, the pace of job creation remains subdued. On a positive note, new orders expanded at the fastest pace since May 2011, suggesting that activity may reaccelerate in the coming months.
At a country level, Germany’s composite PMI slowed from 55.6 in May to 54.2. Even though the result does point to a strong expansion in economic activity, it still represent the lowest reading in eight months. France’s composite PMI fell from 49.3 in May to 48.0 in June, marking the second consecutive month in which the index has pointed to a contraction in economic activity. Meanwhile, the composite PMI recorded the fastest rate of expansion since August 2007 in all other countries in the region.
Author: Armando Ciccarelli, Head of Data Solutions