The Global Recovery continues to be characterised as stuttering, but the underlying trend is positive. Confirmation of this situation has been provided by the latest Markit Composite Purchasing Manufacturer’s Index for the Eurozone. The survey looks at manufacturing and service sectors within the Eurozone block of 17 nations. The September reading shows that business activity has increased at its fastest rate in over two years. The PMI figure rose from 51.5 in August to a September figure of 52.1; with this type of survey, a figure above 50 indicates expansion.
Looking more closely at the data, the German business activity enjoyed its best rate of growth for eight months. The second largest economy within the Eurozone, France, recorded low levels of growth, but it remains the first positive reading seen in more than 18 months for the French economy.
The Eurozone, as a whole, exited recession in Q2 of this year. Manufacturing within the bloc enjoyed its strongest growth for more than two years during the third quarter (to date) which should help to underline the return to growth of 0.3% seen in Q2.
In keeping with the stuttering nature of the recovery, employment creation within the block remains weak with unemployment seeing its smallest fall for 18 months. Employment is a lagging indicator of recovery, so if the Eurozone growth is sustained there should be a corresponding lift in the employment statistics towards the end of the year. Unemployment across the Eurozone remains very patchy. The average figure is an alarmingly high 12.1% which reflects the severity of the Global Financial Crisis. In 2007, it was at a record low of 7.4% of the workforce; the long-term average unemployment figure for the Eurozone is 9.6%.