Eurozone data points to slower output decline

Marion Dakers

THE EUROZONE’S recession appears to have eased off last month, according to statistics out yesterday.

Markit yesterday revised down its June purchasing managers’ index for the Eurozone by 0.2 points to 48.7.

Despite the downward revision, the final figure marks an improvement of one point on the previous month and the best reading in 15 months – though it suggests the currency bloc’s economy was still in contraction.

Output accelerated in Ireland and Germany, while Spain, France and Italy improved yet remained in negative territory.

“The survey is broadly consistent with GDP falling by 0.2 per cent in the second quarter, similar to the decline seen in the first three months of the year,” said Markit’s Chris Williamson.

“However, there is good reason to believe that the region is stabilising and on course to return to growth during the second half of the year.”

The PMI for the services sector was also revised down, by 0.3 points to 48.3, though Markit pointed out this reading is the best performance since January.

Retail trade volumes for May, also out yesterday, offered another sign that the area’s economic decline is slowing.

The bloc’s retail sales were up by a better-than-expected one per cent in the month, and rose 1.2 per cent across the EU, official data body Eurostat said.

The UK enjoyed the second-biggest rise in retail sales growth across the 27 EU nations, up 2.8 per cent.

In a sign of relief for southern Europe, retail sales in Spain jumped by 1.2 per cent on a monthly basis and eased their annual rate of decline to 6.3 per cent.

But with the Eurozone’s unemployment rate still running at 12 per cent in May, analysts were sceptical about the data pointing to a sustained recovery.

“It still seems unrealistic to expect a marked overall pick up in Eurozone consumer spending in the near term,” said Howard Archer of IHS Global Insight.