Euro area June PMIs to suggest stable second-quarter growth of 0.4% qoq

For June, further growth is expected in both the manufacturing and services sectors. In particular, the manufacturing PMI is likely to increase from 52.2 in May to 52.5. Meanwhile, the services PMI should increase from 53.8 to 54.1 Therefore, despite a similar improvement in June, the relative strength seen in the services sector since last autumn is likely to continue . 

"Our June forecast PMI levels (for both the manufacturing and service sectors) have been consistent with GDP growth of close to 0.4%. Thus our PMI forecasts, if realised, imply 0.4% Q2 15 growth for the euro area - our current growth forecast",says societe Generale.

Looking at the regional breakdown, the German manufacturing PMI is expected to bounce from 51.1 to 51.5, and the services sector PMI to increase from 53.0 to 53.4. 

For the French manufacturing PMI, a slight increase from 49.4 to 50.0 is expected, which would reflect a catching up from surprisingly low levels and an easing of the contraction of the manufacturing sector. 

"We forecast the services PMI is to increase from 52.8 to 52.9, mirroring recent improvements observed in the Bank of France survey",added Societe Generale.