Eurozone: did growth bottom out in Q4 2019?

Chart of the week

The preliminary fourth-quarter growth estimate for the eurozone reveals another slowdown. It came in at just 0.4% on an annualised basis. The figure for the third quarter was revised upwards to 1.1% from the previous estimate of 0.9%.

The flash eurozone composite PMI estimate remained unchanged from December 2019 at 50.9, with manufacturing rising sharply and services falling back.

Our analysis

The current level of the PMI indices is consistent with growth of around 0.5–1.0%, slightly above fourth quarter figures. In parallel, French GDP data show a modest fall during the fourth quarter. Although the GDP breakdown is not yet available, this fall suggests that inventories continued to decline at the end of 2019. If inventory levels are indeed at a low, we may now see a gradual recovery in growth, especially as final household demand is expected to remain driven by favourable employment.


PMI: the Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

Flash PMI: the Flash Manufacturing PMI is an early indicator of where the final PMI figure may settle. The flash reading of PMI is an estimate of the Manufacturing Purchasing Managers’ Index (PMI) for a country, based on about 85% to 90% of the total PMI survey responses each month. Its purpose is to provide an accurate advance indication of the final PMI data.

See also :

United Kingdom: PMI indices rebound in January


The opinion expressed above is dated 31 January 2020, and 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. LAZARD FRERES GESTION – a simplified joint stock company with share capital of €14,487,500 – Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES – 75008 PARIS, FRANCE