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    More on EU PMI from the Markit report

    Markit economist describing the preliminary June PMI results sees the Eurozone GDP growth slackening from the still solid 1Q 0.6% to 0.3%. He also claims that there is some negative influence of political uncertainty (Britain voting on its further EU membership today) in the survey, while the text tells of only ’few explicit references to a potential Brexit.

     The good part of the report is tha acceleration in industry with the best new exports subindex since December (also referenced in the report on Germany alone). However overall growth of new business (so when adding the services sector) was one of the weakest in 1.5 years. The authors also tries to deliver a positive message by linking higher employment component to growing baclogs of work with a conclusion that it is a sign that firms want to take advantage of reobunding demand and see it as a lasting phenomenon so they start to increase capacity. However expectations of businesses about their output prices were lowered further despite evidence of increasing price pressure which bodes ill for Eurozone inflation.

     

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