The euro zone manufacturing PMI rose to 47.4 from 45.7 in May, beating the forecast of 46.6 and hitting the highest level in 15 months. The services PMI was unchanged at 53.3, slightly below the 53.5 forecast. The composite PMI rose to 52.3 from 51.7, hitting the highest level in 12 months.
The euro zone economy is “getting stronger,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. He noted that new orders were growing at a healthy pace and business confidence was being reflected in a steady pace of hiring.
Additionally, de la Rubia pointed to some positive developments for the ECB: Services sector input and output price inflation is declining, a trend that supports the ECB's stance to cut interest rates at its June 6 meeting.
De la Rubia incorporated the PMI figures into his GDP forecast and suggested the euro area was likely to grow at a 0.3% rate in the second quarter, effectively dispelling fears of a recession. He went on to suggest that GDP growth this year could reach closer to 1%, with even higher growth possible.
See the full Eurozone PMI report here.
Also released, France's manufacturing PMI rose to 46.7 in May from 45.3. The services PMI fell to 49.4 from 51.3. The composite PMI contracted again, falling to 49.1 from 50.5.
Germany's manufacturing PMI rose to 45.4 in May from 42.5, its highest level in four months. The services PMI rose to 53.9 from 53.2, its highest level in 11 months. The composite PMI rose to 52.2 from 50.6, its highest level in 12 months.
