Flash European PMIs for July

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Merkel shrugs


REUTERS/Peter Andrews


The eurozone economy is ignoring fears over the impact of Britain’s vote to leave the European Union and is showing “surprising resilience” in the face of the vote, according to the latest PMI data released by Markit on Friday morning.

Markit’s flash PMI for July comfortably beat economists’ forecasts and battled headwinds created by Brexit, but remained subdued over the longer term, hitting 18-month lows in services and composite readings. Manufacturing was at a two-month low.

Here is Markit’s release dashboard:

  • Eurozone services PMI — 52.7, down from 52.8 in June, but up from the 52.5 expected.
  • Eurozone manufacturing PMI — 51.9, outside of June’s final reading of 52.8, and just below the forecast 52 reading.
  • Eurozone composite PMI — 52.9, a big beat on the forecast of 52.5, but down from 53.1 in June.

Markit Purchasing Managers Index (PMI) figures are given as a number between 0 and 100.

Anything above 50 indicates growth, while anything below signifies contraction in activity – so the higher the better.

The numbers are a flash read, meaning they could easily be revised up or down when the final readings arrive at the end of the month. However, given that the readings are among the first reliable economic data to be released since Britain voted to leave the EU, they are still quite significant.

Speaking about the data, Markit Chief Economist Chris Williamson said (emphasis ours):

“The the eurozone economy has shown surprising resilience in the face of the UK’s vote to leave the EU and another terrorist attack in France.

“The overall rate of economic growth is largely unchanged, suggesting that GDP is growing at a slow but reasonably stable annual rate of around 1.5%.

“It is particularly encouraging to see job growth continuing to improve, with business appetite to hire appearing so far unaffected by the uncertainty caused by the Brexit vote, particularly in Germany. .”

And here is the chart from Markit:

markit flash pm july


Note it


It wasn’t just the euro zone as a whole that got readings from Markit on Friday, and the single currency zone’s two largest economies, Germany and France, received readings in small groups. Here’s what things looked like in both countries:

  • Benefits Germany – 54.6, a beat on the forecast of 53.2, and above June’s reading of 53.7.
  • Made in Germany – 53.7, below June’s reading of 54.5, but a beat from expectations of a reading of 53.5.
  • Composite Germany – 55.3, compared to estimates of 53.7 and a reading of 54.4 last month.
  • French services – 50.3, a two-month high, excluding contraction and up from June’s reading of 49.9.
  • French made — A four-month high of 48.6, up from 48.3 in June, but still down.
  • Composite France – 50, a two-month high and over 49.6.

At 9:30 a.m. BST (4:30 a.m. ET), Markit’s flash PMI for the UK will be released and could provide a key first indicator of how big, if any, the economic shock Britain has been experiencing since Brexit.

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