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23 Nov 2015
Upbeat Eurozone PMI doesn’t show inflationary pressures - ING
FXStreet (Delhi) – Bert Colijn, Research Analyst at ING, notes that the Eurozone composite PMI increased to a 4.5 year high in November, beating analyst estimates and both manufacturing and service sector growth accelerated.
Key Quotes
“While service sector growth is still strongest, the improvements in order books and employment in manufacturing do indicate that industrial production might show some more sustained recovery.”
“This upbeat survey about the European economy fell short on one important aspect though: inflation. The survey indicated that despite the strongest output growth and job creation since early 2011, there was still no sign of inflationary pressures. As the ECB has recently shown disappointment with the pace of growth in the core inflation rate in the Eurozone, it is unlikely that the optimism from this survey will lead to less stimulus at their December meeting.”
“The PMI showed mixed results in the two major Eurozone economies. France experienced a decline in the composite PMI as both services and manufacturing saw output growth weaken, whereas Germany saw solid growth in the PMI on the back of a strengthening service sector.”
“Both countries did not provide an indication that inflation is around the corner as selling price growth in Germany was very slight and France saw output prices decline in both services and manufacturing. French managers also indicated that the Paris attacks had impacted confidence and some service sector managers indicated an impact on output in their business. The best performance came from outside the two largest Eurozone economies though, for which further detail will later be provided.”
Key Quotes
“While service sector growth is still strongest, the improvements in order books and employment in manufacturing do indicate that industrial production might show some more sustained recovery.”
“This upbeat survey about the European economy fell short on one important aspect though: inflation. The survey indicated that despite the strongest output growth and job creation since early 2011, there was still no sign of inflationary pressures. As the ECB has recently shown disappointment with the pace of growth in the core inflation rate in the Eurozone, it is unlikely that the optimism from this survey will lead to less stimulus at their December meeting.”
“The PMI showed mixed results in the two major Eurozone economies. France experienced a decline in the composite PMI as both services and manufacturing saw output growth weaken, whereas Germany saw solid growth in the PMI on the back of a strengthening service sector.”
“Both countries did not provide an indication that inflation is around the corner as selling price growth in Germany was very slight and France saw output prices decline in both services and manufacturing. French managers also indicated that the Paris attacks had impacted confidence and some service sector managers indicated an impact on output in their business. The best performance came from outside the two largest Eurozone economies though, for which further detail will later be provided.”