Eurozone: PMI rebounds in June and suggests economic upturn is entrenched
June 25, 2015
The Eurozone’s flash Composite Purchasing Managing Index improved in June, rising to the highest point in four years. According to Markit, the index rose from a revised 53.6 in May (previously reported: 53.4) to 54.1 in June, which is the highest level since May 2011 and came in above the 53.5 the markets had expected; it moved further above the 50-threshold that separates expansion from contraction in business activity.
In the accompanying statement, Markit noted that growth picked up in both services and manufacturing sectors. The survey also showed that employment and new orders improved over the previous month. That said, Markit pointed out that June’s survey showed that order book growth moderated and firms were less optimistic regarding future business prospects as a result of rising uncertainty regarding the impact of the Greek crisis.
At a country level, both PMIs in Germany and France rose notably compared to the previous month. Markit underlined that France’s index hit the highest level since August 2011, while indicated that growth slowed elsewhere in the region in June.
Markit concluded that, “despite the cloud of the Greek debt crisis hanging over the region, the Eurozone saw economic growth accelerate to a four-year high in June. The PMI is signaling GDP growth of 0.4% for the region as a whole in the second quarter.”
Author: Ricardo Aceves, Senior Economist