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23 June 2017
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| Eurozone (The Total Investment & Insurance Solutions) |
The economy of the 19-country eurozone has just enjoyed its best quarter
for more than six years, according to a closely watched survey. The Total Investment & Insurance
Solutions
Though growth eased slightly in June,
financial information firm IHS Markit said Friday that the eurozone's second
quarter overall looks like it will be its strongest since the first three
months of 2011. It expects quarterly growth to be 0.7 percent, up from the
previous quarter's 0.6 percent.
The firm said its composite purchasing
managers' index, a broad gauge of economic activity across the eurozone's
manufacturing and services sectors, dipped to 55.7 points in June from 56.8 the
previous month. Despite the decline, which was more than anticipated in the
markets, the index remains way above the 50 level that marks expansion. The Total Investment & Insurance
Solutions
"The latest reading needs to be looked
at in the context of recent elevated levels," said Chris Williamson, IHS
Markit's chief business economist. The
Total Investment & Insurance Solutions
The survey, which informs the regular policy
discussions at the European Central Bank, is the latest in a long line of
evidence showing that the eurozone has moved up the gears over the past few
months, amid growing confidence about the future.
That was evident too in official French
figures showing that the eurozone's second-largest economy expanded by 0.5
percent in the first quarter, up from the previous estimate of 0.4 percent.
Hopes are high that growth in France, a long-time laggard, will be even higher
over the rest of the year. The pick-up in confidence was clear in the fact that
capital investment rose pretty sharply in the first quarter and that it was due
to private companies and households, not the French state.
Higher French growth should help job
creation, one of the key concerns of the new French government of President
Emmanuel Macron. Unemployment in France has been falling but remains high at
9.5 percent.
According to IHS Markit, the signs are good
for further job gains both in France and the wider eurozone. Its survey found
that job creation in the eurozone remained at a near decade-high as order books
and business confidence were strong. Eurozone unemployment has been steadily
falling and in April was at an eight-year low of 9.3 percent. The Total Investment & Insurance
Solutions
"Factory jobs growth remained
particularly buoyant, thanks in part to production requirements surging higher
on the back of rising exports," Williamson said.The Total Investment & Insurance Solutions
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