Final composite and services PMIs to show resilience in Euro area economy

The PMI figures released this week are expected to continue to reflect resilience in the euro area economy. Lower fuel prices and better job creations, which have continued to boost disposable household income and corporate profit margins, have spurred the demand-led recovery. 

The trend in consumption and services activity is likely to continue. Looking at the individual countries, the German services and composite figures are expected to remain robust and unchanged at 55.2 and 54.5 respectively. A German composite number of 54.5 is consistent with 0.5% qoq GDP growth in Q4. 

In France, the upward momentum seen recently in the PMIs is set to continue, with services likely to gain one tick, increasing from the flash estimate of 52.3, with a similar rise expected in the composite number. Declines in services in Spain and Italy, however, may cause the euro-area composite to slide slightly from 54.0 to 53.9. Similar levels are expected to be maintained over the coming months, though, as economic activity should remain firm (close to 0.4% qoq).