The Eurozone recovery looks like it’s finally underway after manufacturing activity across the region climbed to its highest level since June 2011 with Germany leading the way.
According to the Markit Manufacturing Purchasing Managers Index (PMI) output rose to 51.4 in August, beating July’s figure of 51.3 and beating economist forecasts. Any figure over 50 indicates expansion. The data also showed that new orders for manufactured goods grew at the quickest pace since May 2011.
“Although gains are still only modest, companies reported the strongest improvement in business conditions for just over two years, with a pickup in new orders growth suggesting the upturn will be sustained into September.
‘What’s especially encouraging is that the upturn is broad-based, with PMI’s rising in all countries with the exception of France, where business conditions have at least stabilised after the steep downturn reported earlier in the year. Germany, the Netherlands, Austria, Spain and Italy are now all seeing manufacturing grow at the fastest rates for at least two years, and even Greece saw a marked easing in the rate of manufacturing decline
‘Policy makers will be reassured by the data, which add to growing signs of a building recovery in the Eurozone economy. Yet companies’ reluctance to take on staff suggests that there’s a long way to go before the recovery feeds through to meaningful job market improvement, said Chris Williamson, chief economist at Markit.
Another good sign for the Eurozone is the seeming recovery of the regions car industry with Mercedes Benz, the world’s third-biggest luxury car maker, producing more vehicles than ever before in the first half of the year as it tries to meet demand from Asia. Overall the six-year long decline of the sector has finally stopped with new car registrations rising by 4.8% in July.
The big test for a recovery however is the regions dire unemployment rate. Until more jobs are created the regions recovery will be regarded as tentative at best.
Euro (EUR) Exchange Rates
As of 10:35am
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3217 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8485 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4667<
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6891