In June, Eurozone PMI Services is finalized at 53.6, revised up from 53.4 and up fro May’s 52.9. PMI Composite is finalized at 52.2, revised up from 52.1 and up from May’s 51.8. Among the member states, Italy PMI Composite was at 3-month high of 50.1. Spain was unchanged at 52.1. Germany was unchanged at 52.6. France hit 7-month high at 52.7.
Chris Williamson, Chief Business Economist at IHS Markit said:
“The June PMI surveys indicate that the pace of eurozone economic growth picked up at the end of the second quarter, though it would be wrong to get overly excited by the upturn. The survey is indicative of GDP merely rising by just over 0.2% in the second quarter, and a deterioration of business expectations for the year ahead to one of the lowest seen for over four years suggests the business mood remains sombre. Downside risks to the outlook prevail amid trade war worries, rising geopolitical uncertainty and slowing global economic growth.
“Looking at the largest states, the survey data are consistent with GDP growth easing sharply to 0.4% in Spain and only modest 0.2% expansions in both France and Germany. Italy is on course to see a 0.1% decline.
“Growth is being fuelled by the service sector which is helping offset the deep manufacturing downturn. However, a major concern is that, the longer the manufacturing slump persists, the greater the likelihood of the weakness spilling over to services, where the resilience in the face of the factory sector’s downturn so far this year is looking increasingly unusual.
“Inflationary pressures have also moderated as weak demand prompted companies to increasingly compete on price.
“Given the relatively weak current and future growth being signalled by the PMI and the accompanying slide in inflationary pressures, we expect to see renewed stimulus from the ECB in coming months.”
