Eurozone Manufacturing PMI: Improvement Despite Brexit Vote

According to a report by Markit Economics, the final Eurozone Manufacturing PMI (Purchasing Managers’ Index) stood at 52.8 in June 2016 compared to 51.5 in May. The preliminary reading was 52.6. The PMI figure was higher than Market expectations.

The Eurozone Manufacturing PMI showed a pickup in business activity in June. New orders and job growth rose that month. A Eurozone (HEDJ) (VGK) Manufacturing PMI more than the forecast could boost the euro (FXE).

The higher PMI number could be attributed to significant growth in the manufacturing sectors of Germany (EWG) and Austria compared to other Eurozone countries. Italy, Spain, and Ireland also contributed to rising Eurozone manufacturing activity. However, France’s (EWQ) factory output declined.

Stronger PMI numbers indicate that the Eurozone’s overall economic condition could be stronger in 2Q16. However, to continue this economic growth, the European Central Bank may continue the stimulus program.

After the United Kingdom (EWU) separates from the European Union (IEV), economic growth will be affected for both. First-quarter economic growth stood at 0.6% in the Eurozone, higher than the expectation. And now the manufacturing PMI is signaling an improving condition in the economy.

In the next part of this series, we’ll look at the manufacturing PMI for India.