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Economy in Brief

Flash PMIs Bottom Out
by Robert Brusca March 24, 2009

The manufacturing and Services indices from Markit show that Euro Area PMIs have risen form the bottoms in this cycle. The moves are small and the included chart demonstrates that the move is without much vigor. The services sector is showing the most substantial rebound.

Still the services index remains in the lower 3.5% of its range and the MFG index is in the bottom of 1.6% of its range both since August 1998.

These reports are the first for March and they are the first signs that the pace of decline in the European economy may be slowing. They are still very weak signals since each resides well below the neutral level for this survey which is at a value of 50. Neither survey has developed any sort of upward momentum. So far all we have is a sign of a lesser pace of decline, not of any actual improvement. But this is how the end of the severe phase of recession looks. And it will be good to get that behind us. Once this phase ends remedial actions have more potential to help the economy. .

FLASH Readings
Markit PMIs for the Euro Area
  MFG Services
Mar-09 33.97 40.06
Feb-09 33.55 39.24
Jan-09 34.42 42.16
Dec-08 33.87 42.06
Averages
3-Mo 33.95 40.49
6-Mo 37.25 41.96
12-Mo 43.41 45.72
127-Mo Range
High 60.47 62.36
Low 33.55 39.24
% Range 1.6% 3.5%
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