Thursday, July 24, 2014

Eurozone recovery picks up – except for France --- French nearing third recession since banking crisis as other parts of zone see recovery gather momentum after spring dip -- The dip in fortunes that has spread across the eurozone since spring was reversed last month after businesses expanded output and order books swelled – with the exception of France, which is nearing its third recession since the banking crash. -- A survey of French businesses found sentiment had improved in June, but they still signalled another period of contraction in the currency zone's second largest economy. The French composite purchasing managers' index (PMI) of both the manufacturing and services sector rose to 49.4 from 48.1 in June, but any result below 50 points towards contraction. -- Meanwhile, German business activity recovered strongly and other parts of the eurozone saw the recovery pick up speed. -- The global outlook, which is clouded by the situation in Ukraine, also improved after Chinese factories saw the biggest jump in activity in 18 months, suggesting that the Beijing government's mini-stimulus measures are working. US manufacturers also reported strong demand for their products. -- The German services sector grew at the fastest rate in three years, pushing the eurozone composite PMI to a three-month high. Until the latest figures Germany's economy appeared to be slowing, largely in response to falling orders from China. Analysts said the latest data revealed a turnaround in the summer months that should bode well for the rest of the year. -- Lagging economies such as Spain also performed better than expected, with the largest monthly increase in business activity recorded since August 2007 accompanied by a similar surge in new orders growth. -- Separate official data showed Spain's jobless rate tumbled to its lowest in two years, although nearly a quarter of the labour force is still out of work. -- In France, François Hollande's troubled socialist administration had hoped that a series of major investments and labour market reforms would bear fruit before the summer holiday season. However, unemployment has remained high, order books are low and consumer confidence has waned. -- Financial data provider Markit, which produces the PMI surveys, said: "At the heart of France's woes are a stagnant services economy, which points to weak domestic demand and falling confidence among business and households, as well as an increasingly alarming rate of decline in the manufacturing sector." -- The euro reacted to the generally positive news by rallying from an eight-month low against the dollar to $1.34. It rose against the pound to 79.20 pence, having slumped to a 23-month low on Wednesday. http://www.theguardian.com/world/2014/jul/24/eurozone-recovery-picks-up-except-france-recession

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