Business growth in the Eurozone steadies
The fast pace of business growth that pulled the Eurozone from recession has steadied this month for the first time since June. In particular the service sector showed signs of slowing down.
Leading Purchasing Managers’ Index (PMI) producer Markit collates research from over 30 countries worldwide. Early figures released from this quarter’s PMI demonstrate a decrease of 0.7 to 51.5 last month.
PMI data is formulated from the sum of the percentage number of answers that showed improvement (P1), no change (P2), and deterioration (P3). INDEX = (P1*1) + (P2*0.5) + (P3*0). Thus, a reading above 50 shows approximately no change which in the current accelerating climate still indicates growth.
Positive economic growth from both Germany and France that overshot projected figures was a leading factor in ending the European recession. Business growth in these key Eurozone member states has abated slightly since then, with Germany posting the slowest growth for four months.
Chris Williamson, chief economist at Markit, said the survey data had been positive for four consecutive months and at the beginning of the last quarter expansion was continuing at a quarterly rate of 0.2%, indicating “ongoing, albeit sluggish, recovery”.
At the other end of the spectrum Spain has also show slow improvement. The country has been severely struggling economically, with one in four people having been out for work for more than a year. However, the unemployment rate fell from 26.3% to 26% in the third and fourth quarters respectively. This follows news that Spain has finally come out of recession after the economy grew by 0.1% between July and September, the first positive growth figure in two years.
