Eurozone Growth Remains Firm

07 June 2017 8:26:13 AM

By: DailyForex.com

Data for the 19 countries which share the single European currency, the Euro, suggest that growth continues at the best pace seen for six years. The evaluation is based on the most recent HIS Markit purchasing managers index (PMI) and indicates strong business growth in both the services and the manufacturing sectors for May.

The PMI figure for the Eurozone was unchanged from its April reading of 56.8 which was the fastest rate of expansion seen for six years. The scale has a neutral value of 50 with a reading below that value indicative of a contraction in the sector and conversely, higher values indicating expansion. By this measure, the Eurozone has seen constant expansion in the service and manufacturing sectors since the middle of 2013 when it last fell below 50.

Unsurprisingly, growth has been driven by the two largest Eurozone economies, the German and French economies. The data supports the idea that Eurozone countries will post strong Q2 results next month. The relatively robust manufacturing sector has led to an improvement in Eurozone employment as manufacturers taken on new staff to help meet increased demand, Markit notes that employment is: "rising at one of the quickest rates seen over the past decade".

Chris Williamson, chief economist with Markit summarised the key points of the current survey: "The final readings add to mounting evidence that the Eurozone is enjoying a strong second quarter, consistent with GDP rising at a 0.7% rate. With the rate of job creation rising to one of the highest seen over the past decade, the recovery is also becoming more sustainable, as the improved labour market should feed through to higher consumer spending."

The official level of unemployment for the Eurozone stood at 9.3% in April having eased from 9.4% where it had stood for the previous two months. The current level is the lowest seen since March 2009.

Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.

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