Eurozone manufacturing PMI
According to a report by Markit Economics, the final Eurozone manufacturing PMI (purchasing managers’ index) stood at 55.4 in February 2017 compared to 55.2 in January. The PMI figure is slightly below the preliminary estimate of 55.5 and was the highest since April 2011. The Eurozone manufacturing PMI surprised the market with a huge expansion in February.
The Eurozone manufacturing PMI report showed a stronger improvement in business activity in February. New orders, export orders, and job growth rose at a faster pace. Higher-than-expected Eurozone (HEDJ) (VGK) manufacturing PMI could drive economic growth.
Stronger improvement in domestic demand drove Eurozone manufacturing PMI and increased confidence in regards to demand outlook in the Eurozone economy. On the other hand, the weaker euro contributed the most to the performance of the Eurozone’s exports.
The Eurozone PMI number could be attributed to improvement in the manufacturing sectors of Germany (EWG) and France (EWQ). Most of the countries in the Eurozone saw stronger manufacturing PMI in February 2017. The gradual improvement in all these countries increased confidence in the overall economy (IEV).
Impact on the economy
February manufacturing PMI suggests that the business climate and the overall economy are improving. The upcoming election in France is a major event for the Eurozone. Consumer confidence has been tumbling marginally ahead of the election outcome.
In the next part of this series, we’ll analyze the manufacturing PMI for India in February 2017.