Off the wire
• Spotlight: China's historical rights within dotted line not deniable: People's Daily  • Match-fixing scandal hits Italy again  • Kenyan leader lauds soldiers' global peacekeeping role  • Xinhua world news summary at 1600 GMT, May 23  • Chinese, Uzbek foreign ministers meet on bilateral relations  • Roundup: Kenyan economy remains strong with falling inflation, deficit  • EU FMs meet to discuss better fight to end migration crisis  • Roundup: New elections promise similar results in Spain: poll  • Revised environmental law contained violations: report  • U.S. stocks mostly higher amid Fed officials speech  
You are here: 　 Home

Eurozone PMI slips to 16-month low in May

Xinhua, May 24, 2016 Adjust font size:

Business growth in the 19-country eurozone unexpectedly hit a 16-month low in May, a survey data showed on Monday, fueling concerns over the bloc's second quarter slowdown.

The bloc's purchasing managers' index (PMI), an indicator of the economic health of the manufacturing sector, slipped to 52.9 in May from 53.0 in April, said data supplier Markit in its preliminary report.

The reading, although above the boom-or-bust level of 50, recorded the lowest since the start of 2015, adding further to the suggestion that the robust pace of economic growth seen in the first quarter would prove temporary.

Expectations were exceeded in both France and Germany, led mainly by their service sectors, as manufacturing continued to struggle.

The German composite PMI hit 54.7, well above expectations of a more modest rise to 53.8. In France, the composite PMI reading of 51.1 beat expectations of the index edging higher to 50.2.

Eurozone's latest two months' weak data imply that economic growth has likely slowed in the second quarter, down to a pace of just 0.3 percent, or 1.2 percent in annual terms, said Markit.

The forward-looking indicators also suggest that growth is more likely to weaken further than accelerate.

"Inflows of new work showed the smallest rise for nearly a year-and-a-half, while optimism about the business outlook in the service sector sank to its lowest since July 2015," said Chris Williamson, chief economist at Markit.

The bloc's central bank announced a major stimulus initiative in March, but the impact, according to the survey data, has so far been underwhelming. However, some aspects of the plan, notably the bank's move into the purchasing of corporate bonds and a new tranche of cheap bank loans, have not yet begun.

"Policymakers are taking a wait-and-see approach before deciding on the need for other measures, and putting greater pressure on governments and EU institutions to complement the monetary stimulus with structural reforms and looser fiscal policy, where possible, according to the minutes of the April governing council meeting," said Williamson. Endit