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Eurozone industry bounces into growth mode: PMI survey

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(Globalpost/GlobalPost)

Eurozone industry bounced back into growth mode in July, with the sector logging a two-year high and German manufacturers notably ending five months in the doldrums, a key leading indicator showed on Thursday.

The Markit Eurozone Manufacturing Purchasing Managers Index -- a survey of about 3,000 firms -- came in at an upwardly-revised 50.3 points, the latest sign that a deep and long recession may have ended.

The seasonally-adjusted figure -- up from a first estimate of 50.1 points -- marked the first time manufacturing was above the 50-point boom-or-bust threshold since July 2011.

Markit said that production rose for the first time since February 2012 and that job losses, while still endemic, were slowing.

In star performer Ireland, on 51 points, manufacturing employment rose at the fastest rate in seven months.

The data was released a day after Brussels reported a first, minuscule drop in overall numbers of unemployed people for more than two years -- by 24,000 to 19.26 million.

"The bugbear of eurozone manufacturing remains its lacklustre labour market," said Markit senior economist Rob Dobson.

Overall, though, manufacturing across the 17-state euro currency union that is home to some 340 million people was "nicely placed" to boost third-quarter growth so it could exit recession after six quarters of shrinkage, Dobson said.

"The hope for manufacturers is that current rising confidence in most eurozone countries increasingly encourages businesses to invest more and also encourages consumers to lift their spending," IHS Global Insight analyst Howard Archer said.

Archer nonetheless cautioned that with growth limited and fragile elsewhere around the world, the export spur required to crank up industry remains some way off.

The eurozone has been seen as the main drag on the world economy over the past couple of years as austerity policies adopted to tame the debt crisis have crippled growth.

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http://www.globalpost.com/dispatch/news/afp/130801/eurozone-industry-bounces-growth-mode-pmi-survey