Eurozone: PMI provides silver lining to 2Q performance - ING

Bert Colijn, Senior Economist at ING, notes that after dropping to a one-and-half year low in May, the eurozone PMI increased to 54.8 in June from 54.1.

Key Quotes

“While not a fantastic result, the release does provide a silver lining to the current streak of disappointing data from the eurozone.”

“The overall trend remains subdued compared to the fast-paced growth from late 2017.”

“As expected, optimism among businesses has been easing.”

“Even though the soft patch in eurozone data has been dragging on for a while now, pipeline inflation pressures continue to move in the right direction for the ECB.”

“The eurozone is ending the first half of 2018 much less positively than initially expected. While output growth has maintained a steady pace, 1Q was much slower than 4Q 2017 mainly due to one-off factors.”

“It does not look like 2Q has been much better and while a growth pace of 0.4% quarter on quarter is certainly not bad, it could be that weaker confidence among businesses and consumers will bring permanence to the slower growth pace of the first half year.”