European PMI Day: Europe can't stop the rot

It’s the final PMI day of the month in Europe, meaning we’re getting a final reading for
growth across Europe in February.

On Thursday morning we got readings from the services sector across the Eurozone, as well as a composite figure for the month of February.

That number puts together the manufacturing and services sectors to give an overall picture of growth in the European economy, as well as in individual economies.

The purchasing managers index (PMI) figures from Markit are given as a number between 0 and 100. Anything above 50 signals growth, while anything below means a contraction in activity — so the higher the better.

The verdict? Pretty terrible, especially for France.

Eurozone economic growth dipped to its lowest level in 13 months, with the French economy slipping into contraction. Composite PMI numbers actually beat expectations, reading 53 against an expected 52.7, but were still down from 53.6 in January. Here’s Markit’s chart:

Markit’s chief economist Chris Williamson gave a bleak analysis of the numbers, saying of February’s figures (emphasis ours):

The final eurozone PMI came in slightly ahead of the earlier flash estimate, but still showed the pace of growth waning for a second successive month in February to the slowest for just over a year. The survey data raise the prospect of economic growth deteriorating further from the already meagre pace seen late last year, when GDP rose only 0.3%.

Here are the headline eurozone figures:

  • Manufacturing: 51.2, down from 52.3 in January.
  • Services: 53.3, down from 53.6.
  • Composite: 53.0, also off from 53.6.

And here’s the breakdown for France and Germany:

  • French manufacturing: 50.2, off from 50.3 in January, missing the forecasts of economists.
  • French services: 49.2, a contraction, and down from 50.3 in January.
  • French composite growth: 49.3, down from 50.2.
  • German manufacturing: 50.5, down from 52.3 in January.
  • German services: 55.3, up from 55 in January.
  • German composite growth: 54.1, off from 54.5.

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