22 February 2012 at 9:48 GMT
The above-50 spell in the Composite PMI for the Eurozone was short-lived as it lasted all of one month, January. This morning's (advance) report for February showed that the composite index declined to 49.7 from 50.4 a month earlier and 50.5 expected. The decline was due to the services sector, which declined to 49.4 from 50.4 (50.6 exp.) while manufacturing actually ticked up a bit to 49 from 48.8 (49.4 exp.) though it remains in contraction.
The composite PMI, at 49.7 in February and 49.6 for the first two months of 2012, points to Eurozone economic growth of -0.1 percent q/q. A reading of 51.8 in March is needed for this simple model to point to flat growth in the region's economy. Before that though we will get the final February PMI report on 5 March, which may lead to revisions. According to this simple model the contraction in the Eurozone looks to have eased a bit, but on the other hand these PMIs may struggle to adequately capture the drag from fiscal austerity in most member countries.
