FXStreet (Edinburgh) – Analyst at ING Bank Teunis Brosens has assessed the recent poor releases from the manufacturing and services PMIs in the euro area.
Key Quotes
“Is the best of the Eurozone economic recovery already behind us? The Eurozone July composite PMI fell to 53.7 from 54.2 last month, according to flash estimates”.
“While producer sentiment rallied in the first quarter, it has struggled to maintain momentum since then. Both the manufacturing and services PMIs reversed previous month’s gains in July”.
“The Greek crisis largely appears to have been a non-event for Eurozone producers: neither the uncertainty in previous months nor the agreement struck on 13 July (the PMI survey was conducted afterwards) seems to have affected PMIs in a meaningful way”.
“While PMIs are signalling an ongoing modest recovery for the Eurozone as a whole, country developments are more diverse”.
“July’s PMIs show that while the Eurozone recovery continues going into the third quarter, it will prove challenging to maintain the 0.4% quarterly growth rates achieved in the past quarters. Encouragingly, jobs continue to be added in the Eurozone as a whole. The continuing weakness of the French economy in particular however show that the recovery story remains very fragile”.
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