Eurozone PMI


Eurozone: PMI moderates in July after reaching four-year high

July 24, 2015

The Eurozone’s Composite Purchasing Managers’ Index dropped in July, raising questions whether the recent events in Greece are having an impact on growth in the common-currency block. The indicator fell to 53.7 in July from a revised 54.2 in June (previously reported: 54.1), which had marked the highest level in four years. The print also fell short of the 54.0 the markets had expected. Despite the drop, the index is still hovering above the 50-threshold, which indicates expansion in business activity.

July’s moderation reflected a deceleration in activity in both the manufacturing and services sectors. Markit commented that July’s survey was elaborated between 13 July and 23 July—after the 5 July referendum in Greece and the start of negotiations between Greece and its creditors regarding a third bailout—but there was little conclusive evidence that the events directly affected business conditions in the Eurozone either positively or negatively. That said, the survey found that firms’ expectations in the next 12 months fell to the lowest level seen so far this year.

At a country level, PMIs in both Germany and France fell relative to the previous month. But, Markit pointed out that elsewhere in the region, the pace of expansion in business activity accelerated over the previous month, “pushing the pace of growth further ahead of both France and Germany.”

Markit concluded that, “economic growth lost only slight momentum in July amid the rollercoaster events of the Greek debt crisis during the month. The rate of expansion remained reassuringly robust to suggest that it was by-and-large ‘business as usual’ for the region as a whole.”

FocusEconomics Consensus Forecast panelists expect the economy to expand 1.4% in 2015, which is unchanged from last month’s forecast. For 2016, panelists expect the economy to expand 1.7%.

Author:, Senior Economist

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Eurozone PMI Chart

Euro PMI July 2015

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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