Mario Blascak, PhD
Independent Analyst
- The Eurozone manufacturing PMI rose to 55.1, the highest in last 2 months while services PMI decelerated to 54.4 and composite PMI fell to a 2-month low of 54.3 in July.
- Faster growth in Germany contrasted with a slight slowing in France.
The early estimate of the economic activity in the Eurozone combining the purchasing managers' indices (PMI) in both manufacturing and services slowed down to 54.3 in July compared with 54.9 in June, representing a 2-month low.
While activity picked up in Germany it slowed in France resulting in overall decline. Elsewhere, growth was the weakest for 21 months, slipping lower in both manufacturing and services.
The third-quarter started on the softer footing, with the July reading for composite PMI consistent with quarterly GDP growth of 0.4%, down from a 0.5% expansion indicated by the surveys for the second quarter.
According to Chris Williamson, the chief economist at IHS/Markit and the author of the PMI report: “the renewed slowdown comes as a disappointment, confirming suspicions that June’s
rebound was temporary, largely due to businesses in some countries making up for an unusually high number of public holidays in May.”
There are are signs that improving domestic demand in many countries of the Eurozone that are expected to drive robust service sector expansion and support the manufacturing sector as the big picture for exports is deteriorating in light of escalating trade wars with a detrimental
effect mainly on manufacturing.
The Eurozone PMI and GDP
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