Bert Colijn, senior economist at ING, notes that the Eurozone PMI fell to 50.7 in January from 51.1, indicating that 1Q is again off to a disappointing start.
“The big question about the eurozone economy is currently when the bottom of the slowdown will be reached. A bounce back was already expected in 4Q, but even at the start of the new year there are few signs of recovery. The rate of output growth was the weakest since mid-2013 and new orders for goods fell for the fourth month in a row, according to the survey.”
“While the eurozone economy was starting to push the limits of production capacity last year, the PMI indicates that this is less the case at the moment.”
“The weak PMI was heavily influenced by France again, which saw a steepening decline in output, according to the PMI.”
“A cautious ECB is to be expected today and this PMI adds to the growth worries that will be addressed at the governing council meeting.”