"The Euro-Zone composite Purchasing Managers Index (PMI) rose slightly in March (to 37.6) from the record low of 36.2 registered in February. The PMI reading for manufacturing rose to 34.0 (from 33.6) while the services component was up to 40.1 (from 38.9). (You need to bear in mind that 50 is the neutral point (marking the boundary between expansion and contraction) on these indexes, and any reading below 40 means a very significant rate of contraction).
So it now seems virtually certain that the Q1 Eurozone GDP contraction will be far worse than the Q4 2008 one. Taking into account that the eurozone contracted by 0.2% in Q3 2008, and by 1.5% in Q4, then, in my humble opinion, the data we are seeing for this quarter are entirely consistent with a 2% quarterly contraction (or an annualised 8% rate of contraction) or more. As I said last month, not quite Japan territory yet, but certainly not far behind. And for those who simply don’t believe the PMIs can tell you so much, here is Markit’s own chart, showing the strong underlying relationship between movements in GDP and the *flash* composite PMI. Pretty impressive I would say."
- continuar a ler em The Euro-Zone March PMI Holds Near February’s Record-Low afoe A Fistful of Euros European Opinion.