Eurozone: Composite PMI index slightly down, but manufacturing PMI is improving


After hovering around 53 since the beginning of the year, the Eurozone’s flash composite PMI for September slipped slightly from 52.9 to 52.6.

This drop masks a marked improvement in manufacturing which bounced from 51.7 to 52.6. When monthly volatility is removed, an upward trend appears to be emerging from February’s low point.

Meanwhile, the services PMI reading fell from 52.8 to 52.1.


Our Analysis

A closer look at France and Germany reveals that France’s composite PMI has risen by more than three percentage points in the last two months. At 53.3, it returns to its June 2015 peak, a record high since 2011.

Its German counterpart fell to 52.7, its lowest level since May 2015, although the country’s IFO index makes for more reassuring reading: following its two-point fall in August to 106.3, it bounced back by over three points to reach 109.5, its highest level since June 2014. Germany’s services IFO reading was similarly positive.

September’s composite PMI fall, therefore, can likely be explained by volatility effects and does not necessarily signal a slowdown.

The opinion expressed above is dated September 23rd, 2016 and is liable to change.

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS.