Handelsbanken forventer en stabil PMI for Eurozone
PMI stable in November
As expected, the Markit Purchasing Managers Index (PMI) composite stabilised last month after setbacks in the previous two months, which strengthened increased worries about weakening growth momentum in the eurozone. We expect the November reading to be almost stable with a small decline to 52.0.
Recent developments on financial markets support our expectation, as indicated by the small rise in the November Syntax barometer. Hence, stock markets have regained some strength, yields have decreased somewhat and energy prices have fallen further. Additionally, the EUR has weakened, but we still expect a wait before the lagged effect reverses and contributes more positively on especially manufacturing confidence. We thus forecast the PMI to slip to 50.2 in November. The service index is expected to remain close to the October level at 52.3. Unemployment is decreasing at an unchanged modest pace, and consumer confidence seems to have stopped falling, as we expect a small increase in the November Consumer Confidence Indicator to -10.5 from previously -11.1.
The PMI at this level in Q4 is compatible with continued modest growth. Sentiment surveys appear to be in the doldrums, with fears of fundamental euro zone weakness in a tug of war with a US recovery and potential ECB stimulus. It is important for sentiment surveys to rise soon if the ECB’s modest recovery forecast is not to be questioned further.
