Eurozone PMI Says the Economy Is Doing ’Fine’View all comments (0)0The composite PMI increased from 50.6 to 51 in July. With uncertainty all around, an economy showing slight growth, increasing employment and weak inflation sounds surprisingly benignIt’s really hard to get a good sense of direction about the eurozone economy at this point. Incoming data is still very much influenced by the US frontloading of European goods. This makes it hard to judge the underlying state of the manufacturing sector. Fortunately, the PMI tells us a bit more about how the economy is performing.And the answer is...decently enough. The PMI reports a slightly expanding economy in July, after a weak second quarter. The improvements in the service sector are particularly encouraging. The service sector had seen weakening sentiment data, including warnings about weaker demand and output, but June saw some stabilisation, and July’s data shows expansion again. Being the largest part of the eurozone economy, this matters a lot for third-quarter growth prospects.Manufacturing production has been bouncing around on trade developments, but the manufacturing output PMI does indicate that output has seen modest gains in recent months. Then again, new orders for manufacturing weakened in July, so whether a recovery can be maintained – especially with uncertainty around a possible trade deal with the US – is very much up in the air.The inflation picture from the PMI shows softness for both goods and services, in line with an economy that is showing some growth but facing a lot of uncertainty. Demand for workers increased again, which adds up to a pretty benign growth environment if you consider all of the external risks to the outlook.For the European Central Bank, today’s PMI won’t sway the governing council towards a different outcome of the interest rate decision later today. The ECB will be happy to sit this one out, watch out for potential drama over the summer and look at possible rate cuts again in September.Disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user’s means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read moreOriginal PostEurozone PMI Says the Economy Is Doing ’Fine’View all comments (0)0Latest commentsInstall Our AppScan QR code to install appRisk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.© 2007-2025 - Fusion Media Limited. All Rights Reserved.