Eurozone: PMI inches up in August
August 23, 2018
Leading data suggests that the Euro area’s economic momentum remained largely unchanged in August. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, inched up from July’s 54.3 to 54.4 in August. The result undershot expectations of a slightly larger increase to 54.5. The composite PMI lies well above the 50-threshold, signaling expanding business activity in the Eurozone.
August’s increase was driven by a marginal acceleration in output growth, although the pace of expansion was still one of the weakest recorded in the past year-and-a-half. Similarly, new order growth picked up slightly, but remained subdued in the context of recent historical data. Employment, however, was a bright spot in the survey, growing at the fastest pace in six months. Meanwhile, business confidence fell to a neatly two-year low amid rising inflation, moderating demand and political concerns.
Regarding the two largest Eurozone economies, the composite PMI rose in both Germany and France. Germany benefited form stronger services sector activity, while France saw a pickup in both the manufacturing and services sectors. Elsewhere in the region, business conditions deteriorated with output and new order growth rates slumping to nearly two-year lows.
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%.