For its own benefit, Europe is

shrugging off the shock of Brexit

Tuesday 26 July 2016
http://pacificenergyassociates.com/news/for-its-own-benefit-europe-is-shrugging-off-theshock-of-brexit/

According to the latest PMI data released by Markit, the eurozone economy is shrugging off
fears about the impact of Britain's vote to leave the European Union, and is showing
"surprising resilience" in the face of the vote. There is an acceptance from all sides that level

of interconnectedness that exists between us all demands us to continue working together,

and towards the interests of us all.
Markit's flash PMIs for July largely beat the forecasts of economists, and fought against the
headwinds created by Brexit, but remained subdued in the long term, hitting 18-month lows
in both the services and composite readings. Manufacturing was at a two-month low.
Here is the scoreboard of Markit's releases:

Eurozone Services PMI 52.7, down from 52.8 in June, but up from the 52.5 reading
expected.

Eurozone Manufacturing PMI 51.9, off from June's 52.8 final reading, and just below
the 52 reading forecast.

Eurozone Composite PMI 52.9, a big beat on the 52.5 forecast, but down from 53.1 in
June.

The purchasing managers index (PMI) figures from Markit are given as a number between 0
and 100.
Anything above 50 signals growth, while anything below means a contraction in activity
so the higher the better.
The figures are a flash reading, meaning that they could easily be revised upwards or
downwards when final readings come in at the end of the month. However, given that the
readings are some of the first hard economic data to be released since Britain voted to leave
the EU, they're still pretty important.
Speaking about the data, Markit's chief economist, Chris Williamson said (emphasis ours):
"The eurozone economy showed surprising resilience in the face of the UKs vote to leave
the EU and another terrorist attack in France.
"The overall rate of economic growth is largely unchanged, suggesting GDP is growing at a
sluggish but reasonably steady annual rate of around 1.5%.

"Its especially encouraging to see employment growth continuing to improve, with firms
appetite to hire seemingly so far unaffected by the uncertainty caused by the Brexit vote,
especially in Germany."
It was not just the eurozone as a whole to get readings from Markit on Friday, and the two
biggest economies in the single currency area, Germany and France, received breakout
readings. Here is how things looked in both countries:

Germany Services 54.6, a beat on forecasts of 53.2, and above June's 53.7 reading.

Germany Manufacturing 53.7, below June's 54.5 reading, but a beat on expectations
of a 53.5 reading.

Germany Composite 55.3, compared with estimates of 53.7, and a reading of 54.4
last month.

France Services 50.3, a two-month high, out of contraction and up from June's 49.9
reading.

France Manufacturing A four-month high of 48.6, up from 48.3 in June, but still
shrinking.

France Composite 50, a two-month high and up from 49.6.

At 9:30 a.m. BST (4:30 a.m. ET) Markit's flash PMI reading for the UK will be released, and
could provide a first key indicator of how big, if any, the economic shock to Britain has been
since Brexit.