Euro area’s steady, slow growth to continue – RBC CM

Cathal Kennedy, European Economist at RBC Capital Markets, notes that the euro area headline composite PMI weakened slightly to 52.9 in May.

Key Quotes

“That was despite both the German and French readings showing improvement suggesting weakening elsewhere in the currency zone. So while the PMIs continuing to point to expansion in the euro area they are not showing any pick-up in momentum; the stand-out feature of recent PMIs readings is just how static they have been in recent months, since February the composite has fluctuated between 53.1 and 52.9 consistent with a picture of steady but slow growth. Our PMI based indicator shows the latest readings as consistent with growth of 0.3% suggesting Q2 is growth likely to slow from Q1’s 0.5%.”