Previews and such of Eurozone PMIs due Wednesday

Bolding mine


  • We expect euro area flash composite PMIs to decline from a multi-year high to 58.2. The drop should be driven by the manufacturing sector, in particular some consolidation in Germany. In France, a modest dip in manufacturing sentiment (58.0) should be offset by services strength (59.5).


  • While the PMI surveys only feature hard facts such as the current trend of production, orders and employment, we have repeatedly noted in the past that financial market setbacks and political crises have an effect on the responses.
  • We are thus looking for the PMIs to drop slightly in February even with economic data remaining sound.
  • Specifically, we envisage the manufacturing index to come in at 59.0, from 59.6 (consensus: 59.2), and its services counterpart at 57.5, from 58.0 (consensus: 57.5).


  • We expect the euro area composite PMI to fall to 57.6 in February from 58.8 in January.
  • At the sector level, we expect the regional manufacturing PMI to decline to 58.8 from 59.6 and the services PMI to fall to 56.8 from 58.0. These projected declines are likely to have been triggered by heightened market volatility.
  • The overall level of these indicators is likely to remain high and consistent with Q1 GDP growth of around 0.8% q-o-q after 0.6% q-o-q on Q4.


  • The January data showed no let-up in the positive momentum behind the euro area economy. At 58.6, the composite PMI reading reached its highest level since June 2006 and ahead its Q4 average of 57.2. That left our PMI-based GDP indicator pointing to Q1 growth of 1% q/q.
  • However, the PMIs, and survey data more generally, appear to be overstating the pace of growth at present so we are treating the growth signal from the PMIs with a degree of caution at present and see a possibility that the main surveys could retreat from its current cyclical highs in coming months.
  • For this month's 'flash' PMIs, we see both the services, to 57.6, and manufacturing, to 59.0, PMIs falling back slightly.