Eu­ro­zone's July busi­ness growth ex­ceeds ex­pec­ta­tions - PMI

The Pak Banker - - BUSINESS -

LON­DON: Eu­ro­zone busi­ness growth ac­cel­er­ated at the end of last month as com­pa­nies largely put the Greek debt cri­sis be­hind them, sug­gest­ing the bloc's eco­nomic re­cov­ery is on track, a sur­vey showed on Wed­nes­day. Greece's flir­ta­tion with bank­ruptcy had threat­ened to wreck the cur­rency union, but Athens agreed a frame­work bailout plan with its Euro­pean Union part­ners in mid-July in ex­change for strin­gent re­forms and bud­get aus­ter­ity.

With con­di­tions and sen­ti­ment im­prov­ing in the bloc af­ter the deal, Markit's July fi­nal Com­pos­ite Pur­chas­ing Man­agers' In­dex (PMI) beat an ear­lier es­ti­mate of 53.7, set­tling at 53.9. That was shy of June's four-year high of 54.2, but the in­dex has now been above the 50 mark that sep­a­rates growth from con­trac­tion since mid-2013. The com­pos­ite PMI pointed to third-quar­ter ex­pan­sion of 0.4 per cent, Markit said, in line with the ex­pec­ta­tions for the pre­vi­ous three months but less than the 0.5 per cent me­dian forecast in a Reuters poll taken two weeks ago. "The Eu­ro­zone econ­omy showed re­as­sur­ing re­silience in the face of the Greek debt cri­sis in July," said Chris Wil­liamson, Markit's chief economist.

"With sur­vey re­sults like these, the Euro­pean Cen­tral Bank will no doubt see the Eu­ro­zone re­cov­ery as re­main­ing firmly 'on track', sup­port­ing the view that the re­gion looks set to grow by at least 1.5 per cent in 2015." Ser­vices, which dom­i­nate the bloc's econ­omy, also per­formed bet­ter than first thought. A PMI cov­er­ing the sec­tor came in at 54.0, above the flash 53.8. In June, it was 54.4, bet­ter than a four-year high. How­ever, as in ev­ery month since early 2012, busi­nesses cut prices to en­cour­age busi­ness - although only slightly. The com­pos­ite out­put price subindex rose to 49.8 from June's 49.4, its high­est read­ing since it fell be­low 50 in April 2012.

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