Private sector industry in the eurozone returned to growth in July, according to a closely monitored survey, boosting hopes that the currency will soon emerge from recession.
Emerging from recession
The Markit eurozone Purchasing Managers’ Index (PMI), which calculates business output, was 50.4 in July. A figure more than 50 signifies growth.
July’s business output was higher from 48.7 in June, which marks an 18-month high.
The eurozone has been struggling with the economic downturn since the end of 2011.
“The best PMI reading for one-and-a-half years provides encouraging evidence to suggest that the euro area could – at long last – pull out of its recession in the third quarter,” said Chris Williamson, chief economist at Markit.
Recovery hopes after survey
Williamson explained that the recovery in the economy was being led by a broad-based upturn in manufacturing, and signs of stabilization in the services sector. He however warned that employment was continuing to decline, although at a slower rate than a year ago.
Markit’s survey found that manufacturers reported the largest monthly increase in output since June 2011, and output in the sector grew for the first time since February 2012.
The PMI measure is based on surveys of thousands of companies across the eurozone and is regarded as a reliable indicator of economic growth.