Eurozone PMIs - a view on upcoming growth in the economy
EUROZONE
Composite PMI
Slow-down: 48.8
EUROZONE
Services PMI
Slow-down: 47.6
EUROZONE
Manufacturing PMI
Fair Expansion: 52.2
Insights
CONCEPT
The Purchasing Managers' Index (PMI) is a leading indicator measuring the health of the economy. Based on surveys of purchasing managers, it helps investors gauge where economic growth is going. A reading above 50 indicates expansion compared to the previous month, while a reading below 50 represents a contraction.
CURRENT READINGS
- The EU Composite PMI (services, manufacturing and construction together) is at 48.8, signaling an expected slow-down in the wider economy, declining fast since last month (in a negative quarterly trend). The EU Services PMI (the largest portion of EU GDP) is at 47.6, signaling an expected slow-down in the sector output and declining fast since last month (in a negative quarterly trend). The EU Manufacturing PMI is at 52.2, signaling an expected fair expansion in the sector output and improving since last month (in a positive quarterly trend).
MECHANICS & MEANING
Higher growth prospects (rising PMIs) generally forecast higher corporate earnings, supporting bullish equity sentiment. Conversely, contracting PMIs signal economic headwinds and defensive market rotations.