Economy

Eurozone June PMI Points to Weak Growth

Douglas A. McIntyre

Published: June 23, 2016 4:59 am

Last Updated: January 13, 2020 6:29 am

The eurozone can be added to large economic areas with weak expansion, according to Markit Flash PMI for June.

Add this to pessimism about the United States, recently voiced by Federal Reserve Chief Janet Yellen and International Monetary Fund comments, and concerns about growth in China, along with suspicion about its data, and the global slowdown is complete.

Markit experts wrote:

June’s flash PMI survey data from Markit point to steady though disappointingly lacklustre Eurozone economic growth. Rising political uncertainty appears to have caused the pace of expansion to weaken slightly and business confidence about the outlook to deteriorate.

Also:

The flash PMI fell from 53.1 in May to 52.8, rounding off the worst calendar quarter since the fourth quarter of 2014. The second quarter is therefore likely to see economic growth slacken from the solid 0.6% expansion seen in the opening quarter of the year to around 0.3%.

An acceleration in the rate of goods production, to the best seen so far this year, was offset by a weakened pace of expansion in services, the slowest for 18 months. While goods producers benefitted from better export sales, service sector companies appear to have been affected by a drop in confidence in domestic markets. Business expectations in the service sector slipped to an 11-month low across the region in June, with companies often citing worries about political change and rising economic uncertainty, albeit with few explicit references to a potential ‘Brexit’.

Yet another comment about dangers of a Brexit on the region’s growth. If the event happens, July’s numbers will be much worse.