Eurozone: PMI consistent with continued steady growth - BBH

Analysts at BBH note that the Eurozone’s flash January PMI was reported and the composite reading of 54.3, down ever so slightly from the 54.4 December reading, is consistent with continued steady growth.  

Key Quotes

“Two details in particular were notable.  Employment is at its best level in nine years and forward-looking new orders also rose.  In addition, there were some signs of pricing power from suppliers, which likely reflects the rise in commodity prices.  Import prices may also have been lifted by the euro's depreciation.”

“Although it will do little to change the dialogue ahead of the April election, France's composite reading of 53.8 is the highest in this short time series (three years old).  Consider that last January the composite was at 50.2, and in June it was at 49.6.  The gains came from services, not manufacturing.”

“By contrast, the German composite slipped to 54.7 from 55.2.  Services were a drag, falling to 53.2 from 54.3.  Manufacturing, on the other hand, rose to 56.5 from 55.6, matching its record high set in January 2014.  We do not want to make a big deal of the decline in German composite reading.  The average from Q4 16 was 55.1 and Q3 53.8.  The 12-month average is 54.3.”