Aline schuiling, chief economist at ABN AMRO, states that the Eurozone’s modest gains according to the PMI index recorded in May and June fell by 52.2 in June to 51.5 in July.
"This reduction was the combined result of a drop in the PMI of the manufacturing sector, which dropped from 48.5 to 47.0, while it was the lowest level since April 2013. At the current level, this indicator is consistent with GDP growth in the euro area Which has grown from 0% to 0.1% in the season-to-season ratio which would be in line with our base scenario for the eurozone.
In fact, the future PMI trend states that the economy will be in recession, with the new exports orders component of the manufacturing PMI falling by almost three points in July, reaching the lowest level since June 2012.
Additionally, On top of that the new business component of the services PMI declined by a full point, while the impact of the industry's poor status on service sector activity was highlighted.
Further details from the PMI report indicate that the weakness in the euro area economy, which began in the sector of exports and production in early 2018, has expanded into the labor market.
In general, the PMI report requires the existence of stimuli in the ECB's policy package.