- Chris Williamson, chief economist at Markit
Euro zone's manufacturing and services sectors have enjoyed a strong performance this month as growth gained steam in the region's biggest economies, Germany and France. According to Markit Economics, the composite index rose to 54.1 in June, up from 53.6 a month earlier, overshooting economists' expectations for a decline to 53.5. France's reading measuring business activity of the two industries surged to the highest level since 2011, while growth in Germany also strengthened. Markit's French composite index rose to 53.4 from 52, the strongest reading since August 2011, as both manufacturing and services strengthened. The flash manufacturing PMI in France came in at 50.5 in June, better than the May's final reading of 49.4, reaching a 14-month high. The flash services PMI came in at 54.1 in the reported month, compared to the 52.8 seen in May, hitting a 46-month high. Germany's composite index of services and manufacturing increased to 54 from 52.6 in May, beating the median estimate for a reading of 52.7. Markit's manufacturing index for Germany climbed to 51.9 from 51.1 in May, while the services measure rose to a three-month high of 54.2 from 53. Ifo institute revised up its growth expectations in the Euro zone's largest economy due to sturdy domestic demand factors and accelerating investment and a construction boom. The German economy is now seen to grow 1.9% this year, the Ifo Institute said in its June update of its semi-annual growth forecasts. The previous economic forecast from December had projected the growth rate of German GDP at 1.5%.
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