- Rob Dobson, senior economist at PMI compiler Markit
Another signs the 17-nation bloc is finally starting to recover from its longest-ever recession came out on Monday, as figures showed that activity in service sector contracted at slowest pace in 18 months, while retail sales fell less than expected. A measure of service sector activity in the Eurozone improved to 49.8 last month, up from 48.3, inching closer to a 50 threshold, which separates growth from contraction. Moreover, the Services Business Activity Index indicates that the region's service sector moved to the verge of stabilization, as the recent GDP figures showed the contraction was the weakest in the past 1 1/2 years. The main contributor to such a positive reading was Germany, where rates of increase hit a five month high, while France, Italy and Spain saw their respective overall rates of contraction ease further. Meanwhile, the final Output Index stood at 50.5 in July, edging up from 48.7 in June and moving into positive territory.
In a separate report the EU's statistical office Eurostat said that sales at Eurozone's retailers dropped 0.5% in June on a monthly basis, after a revised 1.1% rise in the preceding month. Analysts, however, expected a slightly deeper fall of 0.6%. On an annual basis sales ticked down 0.9% in June, after registering a revised 0.3% increase in a month earlier. Markets have projected a 1.2% drop.
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