World Economy

Eurozone Manufacturing PMI Highest in 6 years

Eurozone Manufacturing PMI Highest in 6 yearsEurozone Manufacturing PMI Highest in 6 years

Eurozone factories had their busiest month in more than six years during June, with the expansion even spreading to Greece, a persistent laggard.

The pickup is consistent with other indications that economic growth in the currency area accelerated in the three months to June, having already speeded up in the first quarter MarketWatch reported.

Data firm IHS Markit Monday said its Purchasing Managers Index for eurozone manufacturing—which is based on a survey of 3,000 companies—rose to 57.4 from 57.0 in May, reaching a 74-month high. That was slightly higher than the preliminary estimate of 57.3.

The pickup in manufacturing was led by Germany, Austria and the Netherlands, but also saw activity increase in Greece for the first time since August 2016, albeit very slightly.

The strengthening economic recovery has prompted some policy makers at the European Central Bank to question the need to maintain its stimulus measures at the current settings, although opinion is divided.

Executive board member Sabine Lautenschlaeger said the central bank should prepare to reduce its monetary stimulus despite falling short of its inflation target.

However, others are more cautious given that the annual rate of inflation fell for a second straight month in June, and to its lowest level in 2017. Speaking Sunday, fellow board member Yves Mersch said that while low interest rates ushered had helped bolster the currency area’s economy, the recovery isn’t yet self-sustaining.

Meanwhile, unemployment in the eurozone remained stable in May as a hiring spree remained on course amid a strengthening economic recovery in Europe, EU figures showed Monday.

This kept the unemployment rate at its lowest level since March 2009, though the rate rose slightly in trouble spots Italy and France.

During the worst of the debt crisis, unemployment in the single currency bloc peaked at 12.1% with 19.3 million people looking for work in April 2013. The number of unemployed in May stood at just over 15 million, according to Eurostat.

The latest figure was on par with the 9.3% unemployment predicted by analysts compiled by Factset, a data company.

The rate was again lowest in Germany, the eurozone’s biggest economy, with 3.9% in May, while the second economy, France, saw joblessness edge up to 9.6%.

Greece remained the country with the most unemployed at 22.5% (according to March figures), followed by Spain with 17.7%.

Italy, with its economy shaken by recent banking failures, saw unemployment up from 11.2% to 11.3%.



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