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Economic News

European Composite PMIs Fall Again

June 23, 2023
Francis Généreux
Principal Economist


  • The Flash Eurozone Composite PMI fell from 52.8 in May to 50.3 in June, its lowest level since January.
  • It was led lower by both manufacturing (from 44.8 to 43.6) and services (from 55.1 to 52.4).
  • Composite PMIs were also down in France (from 51.2 to 47.3) and Germany (from 53.9 to 50.8).
  • The UK composite PMI posted a decline as well (from 54.0 to 52.8), though it remains higher than the eurozone reading. The services PMI slipped from 55.2 to 53.7, while the manufacturing PMI ticked down from 47.1 to 46.2, its lowest level this year.


While the eurozone was in a technical recession this winter after posting two consecutive real GDP declines, the PMI indexes were showing an economy on the upswing, especially on the services side. It looks as though that is changing, however. Most PMIs came in below consensus expectations in June. Manufacturing indexes were down sharply again, suggesting more trouble ahead for manufacturers, particularly in Germany. But the big shift was in services, which have kept the economy afloat through many a challenge, including tighter monetary policy. Except in France, services PMIs are still above the 50 mark separating economic expansion from contraction, but they're clearly trending lower. Unless we see a turnaround soon, they could fall below 50 and really put the economy to the test.


The spring PMI data suggests a temporary return to eurozone real GDP growth in the second quarter of 2023. Given how PMI indexes have been trending lately, the European economy is likely to see new challenges in the second half of the year, however. So far the UK has avoided a recession and reported slightly higher PMIs. But high inflation and interest rate hikes should eventually weaken its economy as well.