RTTNews - Indicating that the recession is bottoming out in Eurozone, activities in the manufacturing and services sector dropped at the slowest pace in nine months.
Tuesday, reports said citing data released by the Markit Economics that a composite index for the euro area's manufacturing and services sector rose to 44.4 in June from 44 in May. That was the highest reading since September 2008. A reading below 50 indicates contraction in the sector. Economists had forecast for a reading of 44.9.
The purchasing managers' index or PMI for the 16-country region's manufacturing sector increased to 42.4 in June from the previous month's 40.7, while the consensus was 42.1. The latest reading was the highest since September 2008. At the same time, services PMI dropped unexpectedly to 44.5 from 44.8. The index was forecast to rise to 45.6. However, these indices still signal an economic contraction in the second quarter.
The manufacturing PMI for Germany climbed to 40.5 in June from May's 39.6, while it was expected to increase to 41. Meanwhile, the services PMI unexpectedly eased to 44.3. Economists had forecast an increase to 46 from the previous month's 45.2.
The gauge for the French manufacturing sector stood at 45.5, up from the previous month's 43.3 and above the expected reading of 44.5. The PMI for the country's service sector dropped to 47.5 from 48.3, while it was expected to rise to 48.6.
The developments in PMIs strengthen expectations that the European Central Bank will hold its key interest rate at a record low of 1% for some time. ECB President Jean-Claude Trichet Monday warned that there are still risks of a sudden emergence of unexpected financial turbulence.
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