THE EUROZONE’S private sector finally began growing again in June– albeit marginally – with Markit’s purchasing managers’ index rising above 50 for the first time in 17 months.
The overall figure for last month, published yesterday, was 50.5. Germany led the currency union once again with a score of 52.1. Italy, France and Spain were all contracting but the Italian and Spanish figures were the best in two years. Outside the bloc, the UK recorded a score of 60.2.
Markit’s purchasing managers’ index (PMI) for services came in at 49.8 for the Eurozone in general, indicating that the sector is edging toward a recovery – even though it still shrunk slightly in July.
Though unemployment in the euro area still seems to be rising, the rate of job losses slowed to a 16-month low last month.
Berengberg’s Christian Schulz commented: “With output growing, unemployment should stabilise this autumn and later begin to fall. Jobs growth will be supported in some countries by the major labour market reforms which allow companies to hire earlier in the recovery process”. Schulz added that if implemented properly, such reforms and a robust growth environment could see other European countries replicate the experience of Germany after its significant reforms in 2004.