Eurozone staggers forwards

THE EUROZONE economy has continued to grow this month despite escalating political turmoil over the debt crisis, fresh data suggested yesterday.

A “flash” estimate of activity across the 17-nation single currency area came held steady at 51.1 in a purchasing managers’ index (PMI).

All figures above 50 point to economic growth, yet the number “still paints a very subdued picture”, said ING’s Martin van Vliet.

The manufacturing part of the survey pointed to contraction in the Eurozone-wide industry for the first time in two years.

And investor confidence has plummeted in recent weeks, a German Zew survey confirmed yesterday.

The widely-regarded Zew index collapsed to -37.6 in the latest analysis, down from -15.1 the previous month.

The survey’s take on the current economic situation dropped to an even more severe extent, printing 53.5, from 90.6 the previous month.

The gloomy European data was mirrored in China, where a PMI survey showed the manufacturing sector still in decline.

Factory output came in at 49.8 in August – although this was an improvement on July’s score of 49.3 in July. HSBC, which publishes the figures, said the August PMI was consistent with manufacturing growth of around 13 per cent from a year earlier.

“We maintain our forecast of a soft landing in growth [for China],” said Ting Lu of BAML.