Eurozone: PMI points to improvement but “downturn cannot be ruled out”
October 23, 2014
The flash estimate of the Markit Eurozone PMI Composite Output Index came in at 52.2 in October. The result was up from both the revised 52.0 recorded in September (previously reported: 52.3) and the 51.7 that market analysts expected. The composite PMI—the result of a survey of over 5,000 manufacturing and services businesses—improved for the first time in the last three months, settling at the highest level since July. In addition, the index has been above the 50-threshold that signals a stable economic outlook for the past 16 months.
October’s improvement was underpinned by a stronger reading in the manufacturing sector while the services sector recorded the same result as in September. According to Markit, “[w]hile the survey suggests the euro area has so far avoided a slide back into recession this year, a renewed downturn cannot be ruled out.”
At a country level, Germany’s composite PMI picked up in October and reached 54.3, which was a slight improvement over the 54.1 recorded in September. The result marked the eighteenth consecutive month in which PMI was in expansionary territory. France’s composite PMI ticked down from 48.4 in September to 48.0 in October, marking the sixth consecutive reading below 50. Meanwhile, the composite PMI for all the other countries in the region rebounded from the 11-month low recorded in September.
Author: Armando Ciccarelli, Head of Data Solutions