LONDON (dpa-AFX) – The corporate mood in the Euro zone recovered strongly from its slump in the Corona crisis in June. As the research institute IHS Markit announced on Tuesday, the purchasing manager index it raised rose from 31.9 points in the previous month to 47.5 counters. Analysts had expected an increase, but on average only to 43.0 points. In the Corona crisis, the mood barometer dropped to a historic low at a record pace.
The mood improved significantly both in industry and among service providers. However, the indicators for the euro area are still below the growth threshold of 50 points. In France, however, they rose above this threshold in both areas. In Germany, on the other hand, they remained below, although the indicators also rose significantly.
In Germany, the largest economy in the eurozone, the purchasing managers’ index rose to 44.6 points in industry and 45.8 points in the service sector. The economy is increasingly showing signs of life, said Markit, referring to the relaxation of corona restrictions. The demand is still weak, but it is recovering.
In France, the second largest economy in the euro zone, the mood improved even more than in Germany. Both in industry and in the service sector, the indicators rose again after the crisis crash to values that indicate economic growth. The results indicated that France is entering a phase of economic recovery, commented Markit economist Eliot Kerr.
Banking economists, however, were dampening expectations with regard to the entire eurozone. “There will be no quick return to the old growth path,” said Thomas Gitzel, chief economist at VP Bank. The purchasing manager indices are currently to be understood primarily as a rough water level indicator. This is mainly due to the construction of the indices, which only ask about the direction of the mood change, but not about the extent.
Christoph Weil from Commerzbank was also cautious. On the one hand, it took time to repair the supply chains that had been interrupted by the crisis. On the other hand, global demand will continue to be slowed down by the ongoing fight against the corona pandemic. Added to this are the increased unemployment, the uncertainty about further development and the continuing corona restrictions. Economic output will not reach its pre-crisis level until 2022.
Region / index June forecast for the previous month
Total 47.5 43.0 31.9
Processed Wt. 46.9 45.0 39.4
Services 47.3 41.5 30.5
Processed Weight 44.6 42.5 36.6
Services 45.8 42.3 32.6
Processed Weight 52.1 46.0 40.6
Services 50.3 45.2 31.1
(Data in points)
/ bgf / jsl / jha /