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| Eurozone's 18-month-long recession may be over, economic surveys suggest | Eurozone's 18-month-long recession may be over, economic surveys suggest |
| (about 2 hours later) | |
| The lengthy eurozone recession may be over after a survey of thousands of private sector firms across the region found they are growing for the first time in 18 months. | The lengthy eurozone recession may be over after a survey of thousands of private sector firms across the region found they are growing for the first time in 18 months. |
| The monthly healthcheck of firms in the euro area found that manufacturing output has risen for the first time since February 2012. Service sector firms are also pulling out of their long decline, with France and Germany leading the way out of the downturn. | The monthly healthcheck of firms in the euro area found that manufacturing output has risen for the first time since February 2012. Service sector firms are also pulling out of their long decline, with France and Germany leading the way out of the downturn. |
| Data provider Markit, which compiles the monthly Purchasing Managers' Index (PMI), said the figures showed the eurozone is stabilising. | |
| "The best PMI reading for one-and-a-half years provides encouraging evidence to suggest that the euro area could, at long last, pull out of its recession in the third quarter," predicted Chris Williamson, chief economist at Markit. | "The best PMI reading for one-and-a-half years provides encouraging evidence to suggest that the euro area could, at long last, pull out of its recession in the third quarter," predicted Chris Williamson, chief economist at Markit. |
| Markit's composite PMI rose to 50.4, from 48.7 in June, which is the best reading since January 2012. Any figure over 50 indicates growth. | Markit's composite PMI rose to 50.4, from 48.7 in June, which is the best reading since January 2012. Any figure over 50 indicates growth. |
| Germany's service sector growth hit a five-month high and French factories, which have suffered through the country's downturn, returned to growth with the strongest performance in 17 months. | Germany's service sector growth hit a five-month high and French factories, which have suffered through the country's downturn, returned to growth with the strongest performance in 17 months. |
| Economic output in the eurozone has been shrinking since the last three months of 2011, the longest recession since the single currency was created. Data due out in August will show whether the trend continued in the second quarter of 2013. | Economic output in the eurozone has been shrinking since the last three months of 2011, the longest recession since the single currency was created. Data due out in August will show whether the trend continued in the second quarter of 2013. |
| Howard Archer, chief European economist at IHS Global Insight, predicted that the eurozone recovery is finally under way. | Howard Archer, chief European economist at IHS Global Insight, predicted that the eurozone recovery is finally under way. |
| "The eurozone purchasing managers surveys are supportive to the view that the eurozone has finally stopped contracting and could very well eke out marginal growth over the second half of the year," said Archer. "We suspect that eurozone GDP was essentially flat in the second quarter amid improved German growth and reduced contraction in Italy and Spain." | |
| Archer added, though, that the recovery will be hampered by the austerity programmes being implemented across Europe, record unemployment levels and limited consumer spending power. | Archer added, though, that the recovery will be hampered by the austerity programmes being implemented across Europe, record unemployment levels and limited consumer spending power. |
| Markit reported that eurozone firms continued to cut staff, but at a lower rate than earlier this year. | Markit reported that eurozone firms continued to cut staff, but at a lower rate than earlier this year. |
| Williamson said the PMI report will provide "a summer fillip to policymakers, especially in terms of there being light at the end of the tunnel for austerity-hit periphery countries where political and social tensions have risen". | Williamson said the PMI report will provide "a summer fillip to policymakers, especially in terms of there being light at the end of the tunnel for austerity-hit periphery countries where political and social tensions have risen". |
| The euro hit a one month high of $1.3249 against the US dollar after the data was released. European stock markets rose, with the FTSE 100 up 40 points or 0.6% at 6637 in morning trading. | The euro hit a one month high of $1.3249 against the US dollar after the data was released. European stock markets rose, with the FTSE 100 up 40 points or 0.6% at 6637 in morning trading. |