Europe continues to outpace the UK as it seeks to escape from recession, the latest data from the eurozone revealed yesterday, with Germany recovering particularly strongly.
The Purchasing Managers Index, which measures the activity in the services and manufacturing sectors across the 16-country eurozone, rose to 50 in August, up from 47 last month. Any index reading of 50 or more suggests activity is rising, with this month's figure the most positive since last April.
In Germany, the PMI for August came in at 54.2, up from 48.1 in July, the biggest monthly increase in the index since records began. While much of the growth came from the services sector, manufacturing improved too, with the German scrappage scheme having boosted the car industry.
Germany, along with France, surprised economists last week, announcing positive economic growth for the second quarter of the year – and thus an end to their recessions. In contrast, in the UK, GDP fell by 0.8 per cent during the three months to the end of June.
While some eurozone countries remain mired in recession, with Spain and Italy still depressed, Rob Dobson of Markit, which compiles the PMI, said the eurozone economy as a whole was now on target to move out of recession during the third quarter. "The unprecedented downturn has been followed by an historically rapid rebound that positions the eurozone to post growth in the third quarter," Mr Dobson said.
That could be in contrast to the UK, which economists believe has only a 50/50 chance of seeing an end to recession in the current quarter. Along with the US, the UK has lagged other major international economies in moving towards recovery phase.Reuse content