Euro area manufacturing PMI to soften; services PMI to strengthen

The euro area manufacturing PMI is likely to soften from 54.1 to 54.3 in May. On the other hand, the PMI for the services sector should marginally increase from 54.1 to 54.3. Historically, such PMI levels (for both the manufacturing and services sectors) have been consistent with GDP growth of close to 0.4%. This is in line with our forecast of Q2 15 growth of 0.4%. Therefore PMIs is expected to hover around current levels in the coming months. 
The improvement in PMIs observed since last Autumn stems mostly from the services sector rather than the manufacturing sector. This is because household consumption has been highly supportive of services activities, but corporate spending and export growth have taken time to respond to the positives of a lower oil price and weaker euro.