Eu­ro­zone busi­ness hits 4-year high: sur­vey

The China Post - - FRONT PAGE -

Eu­ro­zone busi­ness ac­tiv­ity rose sharply in June to hit a more than four- year high, which an­a­lysts said sug­gested a bet­ter- than- ex­pected re­cov­ery in the mak­ing de­spite the Greek cri­sis.

The closely watched Markit Eco­nom­ics Com­pos­ite Pur­chas­ing Man­agers Out­put In­dex (PMI) came in at 54.1 points in June, up from 53.6 in May, for its best per­for­mance since May 2011.

Any read­ing above the boom- or-bust line of 50 points shows the econ­omy ex­pand­ing.

The 19-na­tion eu­ro­zone has been re­cov­er­ing steadily but mod­estly for the past 18 months as fears Greece could de­fault on its debt and crash out of the bloc have damp­ened busi­ness con­fi­dence.

Markit chief economist Chris Wil­liamson said the latest data sug­gested the eu­ro­zone econ­omy was do­ing bet­ter than ex­pected, with over­all growth in the sec­ond quar­ter likely to be in line with the first quar­ter’s 0.4 per­cent.

That would give a full-year gain of 2.0 per­cent, a re­spectable per­for­mance af­ter re­cent weak­ness, with the up­turn broad­based.

“De­spite the cloud of the Greek debt cri­sis hang­ing over the re­gion, the eu­ro­zone saw eco­nomic growth ac­cel­er­ate,” Wil­liamson said.

“The un­cer­tainty gen­er­ated by the re­cent es­ca­la­tion of the ( Greek) cri­sis ap­pears to have taken some of the steam out of hir­ing growth, but em­ploy­ment over the sec­ond quar­ter as a whole has nev­er­the­less shown the largest rise for four years to sug­gest that — at present at least - the eu­ro­zone econ­omy is weath­er­ing the Greek storm rel­a­tively well,” he said.

By com­po­nent, Markit said the in­dex for the ser­vices sec­tor — which ac­counts for about two- thirds of all eco­nomic ac­tiv­ity — rose to 54.4 points in June from 53.8 in May, while man­u­fac­tur­ing showed a more mod­est gain to 52.5 points from 52.2.

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