Eurozone PMIs moving sideways in April - ING

Teunis Brosens, Senior Economist at ING, suggests that the Eurozone composite PMI of 53.0 points to continuing modest growth.

Key Quotes

“Flash April Eurozone PMIs barely changed in April, with the services sector edging up but manufacturing weakening slightly. Behind these rather dull headlines, country developments diverge. The German manufacturing sector is doing quite OK and reports decent new order intake. China, Southern Europe and the US are specifically mentioned as sources of order growth.

The French manufacturing sector on the other sank further in recession territory. On balance, PMIs show the French economy stagnating in the first quarter. The start of Q2 is hardly better, which means France continues to be a drag on the Eurozone economy.

On prices, the news was somewhat better. Input prices rose slightly in the Eurozone, with German companies also reporting rising output prices. In France on the other hand, output prices continue to drop as companies struggle to compete.

PMIs point to continuing quarterly GDP growth of around 0.3%. While some will point out the weakness of Eurozone growth, we’d rather focus on the positive: despite major political challenges, external weakness and downside risks, the Eurozone economy manages to stay the course. We expect Q1 GDP growth, due next Friday, to clock in at 0.3%, and today’s PMIs point to similar growth in the current quarter.”