Eurozone PMI Signals Mixed Sector Performance, Manufacturing Weighs Down

Highlights

• Eurozone PMI indicates mixed performance across sectors.
• Services sector shows relative strength, while manufacturing sector weakens.
• Uncertain economic outlook with supply chain disruptions and rising input costs.

Overview

The latest data from the Eurozone Purchasing Managers’ Index (PMI) highlights a mixed performance across different sectors. The HCOB Flash Eurozone Composite PMI Output Index dropped to 50.3 in June. This is marking a 5-month low compared to May’s reading of 52.8. Similarly, the HCOB Flash Eurozone Services PMI Business Activity Index also declined to 52.4, hitting a 5-month low after May’s figure of 55.1.

On the other hand, the HCOB Flash Eurozone Manufacturing PMI Output Index fell to 44.6, reaching an 8-month low from May’s 46.4. Furthermore, the HCOB Flash Eurozone Manufacturing PMI plunged to 43.6, the lowest level seen in 37 months.

The Euro Zone Flash Manufacturing PMI estimate came in at 44.8, slightly below expectations. Meanwhile, the Euro Zone Flash Services PMI estimate was 54.4, indicating a more positive sentiment in the services sector.

These PMI figures suggest a varied performance across different sectors within the Eurozone. While the services sector demonstrated a relatively healthier activity level, the manufacturing sector experienced notable weakness. The overall economic outlook for the Eurozone remains uncertain, with supply chain disruptions and rising input costs continuing to pose challenges.

Short-term Outlook

The combination of declining manufacturing output and weakening PMI figures indicates a bearish outlook for the Eurozone economy in the near term.