Eurozone: A good composite PMI masking contrasting trends

Chart of the week

Two months after the start of the conflict between Russia and Ukraine, the publication of the Composite PMI* Index for the month of April is an opportunity to measure whether this major even is causing a sharp adjustment in activity. The Composite PMI for the Eurozone rebounded from 54.9 to 55.8, exceeding its level of last February. New orders rose from 54.5 to 55. This strength was due to the rebound in services, with the lifting of restrictions allowing activity to pickup.
On the other hand, the momentum is less favorable for the manufacturing sector. The total PMI for the sector fell from 56.5 to 55.3. A more notable decline was seen in new orders, which, at 51.4, are at their lowest since the summer of 2020.

OUR ANALYSIS

Activity in the manufacturing sector continues to be severely constrained by supply problems, and rising energy costs are adding further pressure. While the current level is not worrisome, the trend will need to be monitored.

 

The opinion expressed above is dated April 29, 2022 and is subject to change

See also: https://lazardfreresgestion-tribune.fr/en/increasing-risks-to-chinese-growth/

* PMI: Purchasing Managers Index. PMI indices are confidence indicators that summarize the results of surveys conducted among corporate purchasing
managers. A value above 50 indicates positive sentiment in the sector concerned (manufacturing or services). The composite PMI takes into account both
manufacturing and service sector data

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