Eurozone recovery gathers pace as growth hits two-year high
But picture remains mixed, with good German results contrasting with gloom in France
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Thursday 22 August 2013
A key survey today revealed the eurozone's largest monthly increase in business activity for more than two years - raising hopes of a sustained recovery.
However, the picture painted by the August PMI survey from analysts Markit remained mixed, with German firms toasting their fastest rate of output since January but France suffering an accelerating decline.
The "peripheral" countries of Spain and Italy saw an improvement in growth as exports to neighbouring nations picked up.
Markit chief economist Chris Williamson said: "Structural changes made in countries like Spain, such as reducing labour costs, are filtering through. Arguably, a winding back of austerity in some countries has also helped.
"Overall, there are signs this recovery in the eurozone is starting to look more sustained."
He said the outlook in the region was now at its brightest since early 2010, before the Greek crisis erupted.
The PMI Composite Output Index, in which any figure above 50 indicates growth, rose from July's 50.5 to 51.7 in August.
Employment levels fell for the 20th successive month with the pace of job losses accelerating in both manufacturing and service sector firms.
Germany's position as the powerhouse for the region was heightened by rising demand for its goods both domestically and in its export markets despite concerns about weakening growth in Asia.
Many economists have been concerned about the impact on global demand of the forthcoming reduction of the $85 billion (£54.6 million) a month quantitative easing programme from the US Federal Reserve. Last night's minutes from the Fed's most recent meeting did little to dispel expectations that this so-called "tapering" could begin as early as next month.
Markit's figures on France's weak performance added to scepticism over the accuracy of the surprisingly strong official GDP data for the country in the second quarter of the year.
Shares in Europe and London gained, helped by stronger-than-expected Chinese manufacturing figures. The CAC-40 in France and Germany's Dax index rose 1 per cent, while the Spanish and Italian stock markets gained nearly 2 per cent. The FTSE 100 rose 54.76 to 6445.6.
- 1 Rules on 5p plastic bags likely to lead to arguments at the check-out
- 2 Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
- 3 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
- 4 News agency criticised for describing Amal Clooney as 'actor's wife' in coverage of human rights trial
- 5 David De Gea to Real Madrid: Real finally get their man with £29m bid for Manchester United goalkeeper
Rules on 5p plastic bags likely to lead to arguments at the check-out
Watch the Supermoon live: How to see the brightest Moon of the year tonight
Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
News agency criticised for describing Amal Clooney as 'actor's wife' in coverage of human rights trial
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...