Eurozone: PMI eases at start of Q3
July 24, 2018
Leading data suggests that the Euro area’s economic momentum lost steam in July. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, fell from 54.9 in June to 54.3 in July. The result undershot expectations of a smaller dip to 54.8. However, the composite PMI lies well above the 50-threshold, signaling expanding business activity in the Eurozone.
July’s fall was driven by softer activity in the services sector, while the manufacturing PMI was unchanged from the previous month. Business activity growth in the services sector came in at the second-lowest reading in one year-and-a-half, while business confidence in the manufacturing sector slipped to the lowest level since November 2016. On a bright note, firms added jobs at a healthy pace in July.
Regarding the two largest Eurozone economies, the composite PMI rose in Germany, but fell in France. Elsewhere in the region, business conditions deteriorated in both the manufacturing and services sectors.
Eurozone GDP Forecast
FocusEconomics Consensus Forecast panelists expect the Eurozone economy to expand 2.2% in 2018, which is unchanged from last month’s forecast. For 2019, panelists expect the economy to grow 1.9%.