Eurozone: PMI halts decline in April - ING

Bert Colijn, Senior Economist at ING, explains that after dropping in February and March, the decline in the Eurozone’s PMI has been halted as the PMI was unchanged at 55.2 in April.

Key Quotes

“The stagnation surprised analysts on the upside, but this does not mean that the euphoric view of the economy of 2017 should be making a swift return. Yes, the PMI is still indicating solid growth for the second quarter, we expect 0.5% QoQ GDP growth, but it is also providing further evidence that the stellar quarterly growth rates of 2017 are unlikely to be replicated this year.”

“The PMI indicated further slowing of growth in new orders. The effects of the stronger euro are playing an important role here as new orders from outside the Eurozone slowed as well. Employment growth continued at a fast pace, indicating that the outlook for domestic demand remains positive. Even though labour market pressures continue to be significant, inflation is not set to accelerate according to the survey. Price pressures moderated again in April, as lower growth in input prices was reported despite the elevated oil price.”

“The April PMI and consumer confidence read of last Friday are both evidence that the impact has been limited so far and that growth continues at a healthy pace.”