A measurement of economic activity highlighted a continuing recovery in the euro area in June, led by France.
The latest purchasing managers ’index (PMI) from IHS Markit showed the“ business slowdown eased markedly for the second consecutive month in June ”. “Data-reactid =” 33 ″> The latest purchasing managers ’index (PMI) from IHS Markit showed the“ business slowdown has eased markedly for the second consecutive month in June ”.
The euro area PMI flash came out at 47.5. Pmi are listed on a scale of 0 to 100, with something above 50 for signaling growth and nothing below marking for contraction.
While the estimate suggests that the eurozone economy is still racing to shrink in June, the rate of contraction in May’s improvement is the figure of 31.9.
“The Eurozone PMI flash indicated another strong one from the easing of the region’s decline in June,” said Chris Williamson, chief economist at IHS Markit. “Production and demand are still falling, but no more than collapsing.
“While the second quarter, GDP is probably still falling at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of restrictions lock will help bring the slowdown to an end as we head towards summer ”.
IHS Markit, said the continued closure of hotels and restaurants, and the halt to travel and tourism more generally, continued to slide on the economy of the Eurozone. Factories and businesses in the service sector also saw a drop in new business.
France was the best performer in the eurozone economy. It returned to modest growth in June as the foreclosure eased.
“France has even staged an attempt to return to growth, albeit having suffered a steeper drop in response to the COVID-19 pandemic than Germany,” Williamson said. “Germany and the rest of the eurozone meanwhile, welcome moderation in declining rates.”
Carsten Brzeski, head of the eurozone, economist and world macro chief at the Dutch bank ING, said: second wave is still real, however, the loosening of bans has also revived the economy. ”
However, Williamson said IHS Markit was “very careful about the strength and durability of any economic rebound.” The giant data still predicts that the economy of the Eurozone will decline by 8% for the whole of 2020 and estimates that it will take the three-year block to reach pre-pandemic, GDP levels.
currently negotiating plans to borrow € 750bn as a block to finance an economic recovery fund that will help repair the battered eurozone economy. “Data-reactid =” 63 ″> Eurozone leaders are negotiating plans to borrow € 750bn as a block to finance an economic recovery fund that will help repair the battered eurozone economy.
Claus Vistesen, chief eurozone economist at the Macroeconomics Hall of Fame, told the IHS Markit of the survey data: “We are not in big conclusions based on these figures.
“It is very likely that weak base effects in France led this month’s jump in the PMI, while Germany’s improvement rate is smoother, due in part to the smaller hit first location.
“All we are ready to say for sure at this point is that the slow improvement is still underway, a story confirmed by the details.”