Could Rising Business Activity Signal a European Economic Recovery?
Flash readings of the Purchasing Managers Index show that the eurozone is on track to put up good numbers for the month of September. According to the report by Markit, flash PMI in the eurozone rose to 52.1 in the month of September, representing a significant gain from the 51.5 value in August. The value of 52.1 represents a 27-month high in the value, meaning that it has not been at such levels since the start of the prolonged economic contraction in Europe in mid-2011. Additionally, the number represents the six straight month of increases, boosting confidence that the economies of the region may be building some momentum.
The data for the services and manufacturing sectors bore mixed results. For services, the flash PMI rose to 52.1, a value corroborating the overall statistic, surging upward from 50.7 in August. Similarly to the overall numbers as well, this is a 27-month high for the category. Manufacturing, however, lagged behind, dropping from 51.4 to 51.1 from August to September.
The report noted that the manufacturing data, though it did lag behind expectations, was not terribly worrisome as the numbers are still on track for the sector to post the strongest quarter since 2011. A rise in export production and seasonal variance, especially in the auto industry, are other reasons not to be pessimistic about the modest decline.