- Martin van Vliet, an economist at ING Bank NV
The manufacturing output across the 17-nation bloc that has the Euro in circulation surprisingly expanded this month for the first time in two years, suggesting Eurozone is pulling out of recession. A survey conducted by London-based Markit Economics showed that a gauge of manufacturing activity soared to 50.1 up from 48.8 in June, outpacing analysts' forecasts for a 49.1 reading and finally indicating expansion in the sector. The flash services PMI improved as well, reaching 49.6 compared with 48.3 a month earlier, when it recorded the weakest rate of contraction since January. Another bright spot came from the Composite PMI, which advanced to 50.4 from June, when index showed overall contraction of 48.7.
The main contributor to growth was Germany, which saw its manufacturing PMI increasing to 50.3 in July, from the previous month's reading of 48.6. The indicator soared to a five-month high and returned back above the 50 threshold. The encouraging news came in contrast with the International Monetary Fund statement that the bloc's economy will contract 0.6% this year. The Eurozone economy shrank for six straight quarters, and probably stagnated in the three month through June, while it is expected to gain some momentum this quarter.
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