World Economy

Eurozone Showing Signs of Life

Eurozone Showing Signs of LifeEurozone Showing Signs of Life

Eurozone manufacturing grew faster than initially estimated in June, recording its best performance this year.

A Purchasing Manufacturers’ Index rose to 52.8 from 51.5, slightly higher than the flash estimate of 52.6, Markit Economics said, Bloomberg reported.

The results were collected prior to the result of Britain’s European Union referendum, which saw the country vote to leave the bloc. Eurostat said in a separate report that unemployment in the 19-nation region fell to 10.1% in May, the lowest in almost five years.

“Any Brexit impact is yet to be seen,” said Chris Williamson, chief economist at Markit. “It seems likely that business and consumer spending will be adversely affected across the eurozone in the short term.”

The figures highlight the challenge facing policy makers as they try to assess the economic fallout from Britain’s decision to quit the EU. European Central Bank Vice President Vitor Constancio said this week that while a relatively small trade impact could be magnified by a hit to confidence, the ECB still has the tools necessary to respond to any adverse consequences.

The only nation to show manufacturing in contraction—a reading below 50—was France, which Markit said was likely due to strikes which have disrupted business in recent months. Greece enjoyed a “welcome return to growth,” Williamson said, with its best reading in more than two years.

Eurozone factory growth was led by Germany and Austria, and expansion also gathered pace in Spain, Ireland and Italy.

Joblessness in May was the lowest in Malta, at 4.1%. Spanish unemployment fell below 20% for first time in six years.