Business activity in the eurozone has been keeping up a steady pace and rhythm of growth throughout this month as a recent analysis indicated. Eurozone business activity has been growing steadily despite the fact that the pace of overall economic and financial expansion has been slowing down lately. The most recent Purchasing Managers’ Index (PMI) issued by the market research company Markit went down to 53.9 down from 54 in previous month. Figures above 50 suggest expansion.
Yet, the data indicated that the economic health and success of German and French companies do keep on diverging. Earlier, a similar survey connoted also an improvement in Chinese manufacturing, which has a significant impact on the global economic activity. The emerging markets bank HSBC reports that China Manufacturing PMI went up 49.7 in May even though this still suggests that the sector is contracting. It went up from last month’s score of 48.1.
Last week, official numbers demonstrated that the economy of the common currency club went up by 0.2 percent in the first three months of 2014, which is the same result as in the previous quarter. As the chief economist of Markit, Chris Williamson, commented, “a slight easing in the euro area’s rate of growth was seen in May but doesn’t change the picture of a region that’s enjoying its best spell of growth for three years, especially when an acceleration in growth of new orders suggests that the pace of expansion could pick up again in June”. He added that France remained the greatest concern of the European economy, since was living up to its moniker of “sick man of Europe” by sliding back into contraction as Germany carried on enjoying robust growth and expansion. The rest of the EU is still experiencing its best expansion since mid-2007.
France’s May PMI reading decreased to 49.3, down from 50.6 in April, whereas Germany’s reading was unchanged at 56.1. Markit studies about 5,000 firms in the eurozone to produce its PMI data. The latest readings are the initial calculations, which are based on responses from 85-90 percent of the firms.
