Activity among businesses in the euro zone grew modestly in July for the first time in a year and a half, adding to evidence the crisis-hit economy is stabilizing after a long recession.
Data company Markit said Monday its composite purchasing managers' index, based on polls of company executives in the manufacturing and services sectors, rose to 50.5 in July from 48.7 in June. That is the first above-50 reading, signalling growth, since January 2012. It was revised up from an early estimate last month of 50.4.
The improvement was driven by manufacturing, growth in which outweighed a slight contraction in the services sector. Factory activity in Germany, the bloc's biggest economy and main exporter, showed the strongest performance in 18 months.
The PMIs add to other evidence, such as a slight fall in unemployment, that suggest the economy of the 17 nations that use the euro has passed its worst point after suffering an 18-month recession up to the end of March.
Official data for the April-to-June period are due later this month and are expected to show the economy held steady or even put on modest growth. Monday's surveys for July suggest the improvement continued into the third quarter.
The PMI release Monday "confirms a welcome return to growth for the euro-zone economy at the start of the third quarter, raising hopes that the region can finally claw its way out of its longest-running recession," said Rob Dobson, senior economist at Markit.
But with unemployment still near record levels and governments sticking to austerity plans to control their debts, any economic recovery is likely to be modest and could be derailed, economists say.
nasdaq.com
Data company Markit said Monday its composite purchasing managers' index, based on polls of company executives in the manufacturing and services sectors, rose to 50.5 in July from 48.7 in June. That is the first above-50 reading, signalling growth, since January 2012. It was revised up from an early estimate last month of 50.4.
The improvement was driven by manufacturing, growth in which outweighed a slight contraction in the services sector. Factory activity in Germany, the bloc's biggest economy and main exporter, showed the strongest performance in 18 months.
The PMIs add to other evidence, such as a slight fall in unemployment, that suggest the economy of the 17 nations that use the euro has passed its worst point after suffering an 18-month recession up to the end of March.
Official data for the April-to-June period are due later this month and are expected to show the economy held steady or even put on modest growth. Monday's surveys for July suggest the improvement continued into the third quarter.
The PMI release Monday "confirms a welcome return to growth for the euro-zone economy at the start of the third quarter, raising hopes that the region can finally claw its way out of its longest-running recession," said Rob Dobson, senior economist at Markit.
But with unemployment still near record levels and governments sticking to austerity plans to control their debts, any economic recovery is likely to be modest and could be derailed, economists say.
nasdaq.com
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