Manufacturing activity in the Eurozone increased for the first time in two-years in July as factory output jumped. Combining with Wednesday’s first improvement in two-years to the unemployment rate it appears that the Eurozone is slowly beginning to turn its economy around.
Markit’s Eurozone Manufacturing PMI data rose to 50.3 in July, up from June’s figure of 48.8. It is the first time the figure has crossed the 50 threshold for expansion since July 2011. The data now combines with a series of improving economic data releases, creating hope that the recession ravaged region is on track to drag itself back into growth.
Countries that made the biggest improvements to their PMI were; Greece 47.0 (43-month high), Italy 50.4 (26-month high), Netherlands 50.8 (24-month high), Germany 50.7 (18-month high), France 49.7 (17-month high. Any figure below 50 indicates a contraction.
The European Central Bank concludes a policy-setting meeting later on Thursday but is not expected to make any major changes to policy, backed by a PMI showing little sign of inflation pressures.
“This hopefully places the sector nicely to provide a positive spur to the third-quarter GDP numbers and help the euro area exit recession, Manufacturing output rose again in Germany, Italy, the Netherlands and Ireland during July, while there were welcome returns to growth for France and Austria,” said Rob Dobson, senior economist at PMI compiler Markit.
Any recovery in the economy is likely to be weak as the bloc’s leaders continue to confront problems including record unemployment and a fractured banking system.
The Euro meanwhile has fallen from its four month high against Sterling and dropped from the six-week high against the US Dollar as investors speculate that European Central Bank President Mario Draghi will reassure investors that policy makers will choose to keep interest rates at the current record low level of 0.50%.
Euro (EUR) Exchange Rates
As of 10:30 am
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3244 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8707
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6651 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3636 <