MNI 5 Things: EZ Economy Ends Q2 Stronger Despite Weaker Spain

-- Eurozone Composite PMI Hits 54.9 In June, Up From 54.1 In May

By Jai Lakhani

     LONDON (MNI) - The final reading of the IHS Markit Eurozone PMI Composite

Output Index for June was released on Wednesday, registering at 54.9 (Flash:

54.8; May: 54.1). Here are five things we learned from the release:

     1. Eurozone Economic Growth Driven by Services: As projected in MNI's 5

Things Preview of the Eurozone Composite PMI, the services sector was the key

driver of increased activity in June, offsetting a further moderation in the

pace of manufacturing sector growth. Indeed, the final reading of the Eurozone

PMI Services Business Activity Index rose to a four-month high of 55.2 in June.

All in all, while the composite index indicates that the eurozone economy picked

up steam at the end of Q2, the pace of expansion in private sector activity

nonetheless remains relatively lacklustre, with the average reading for the

quarter as a whole (54.7) registering at its weakest level since Q4 2016.

     2. Spain Reverses May Strength with June Weakness: National level data

showed that Spain was the only member state to see a deceleration over the

month. After having hit a three-month high in May, Spain's Composite PMI

decelerated to a 17-month low in June. Germany and Italy, meanwhile, continued

to see steady increases in the pace of private sector activity growth. Ireland

was the star performer of the month, with its Composite PMI rising to a 5-month

high of 58.1

     3. Business Confidence Rises for First Time in 4 Months: Reassuringly,

business confidence improved slightly for the first time in four months in June.

Nevertheless, sentiment clearly remains at weighed levels, with June's reading

the second-lowest seen over the last ten months.

     4. Improvements in New Business and Output: Both new orders and output

increased at accelerated rates in June. However, at least some of this boost was

a result of depressed activity in May, which saw an unusually high number of

holidays this year. The increase in new business nonetheless resulted in

backlogs of work rising for a 37th consecutive month.

     5. PMI Data Point to Q2 Growth of Around 0.5%: The June PMI data support

the view that Eurozone GDP growth will come in at around 0.5% in Q2. "Eurozone

growth regained momentum in June, rounding off a respectable second quarter

performance, for which the survey data point to GDP rising by just over 0.5%"

Chris Williamson, Chief Business Economist at IHS Markit, commented.

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MAUDR$,MAUDS$,M$U$$$,M$X$$$,M$XDS$]