1st April 2015
Signs of recovery in EU economy
Europe could be on the cusp of a recovery, according to Markit’s final manufacturing Purchasing Managers’ Index (PMI) for March. The depreciation of Europe’s single currency helped increase demand for exports, lifting manufacturing activity to a ten-month high.
While the recovery is still in its early days, any signs of growth will be welcome to the European Central Bank, which recently commenced its quantitative easing program.
Since January this year, the euro declined around 12 per cent, making exports from the European Union cheaper for international buyers. Furthermore, a lower euro also made competing imports more expensive, which drove a strong increase in domestic demand.
However, the signs of growth were played down by Markit’s chief economist, Chris Williamson, who said the recovery is still a “fledgling”, and that the “overall rate of expansion remains only modest”.
Strong PMI figures were noted in Ireland and Spain, while Germany, Italy and the Netherlands also saw activity increase in March. But readings in France, Greece and Austria remained below the 50 level, indicating contraction rather than growth.
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