Tuesday June 23, 10:14 AM
Eurozone business contraction 'easing'
BRUSSELS (AFP) - The business contraction in the 16 countries using the euro was the shallowest for nine months in June, despite a steep decline in the service sector, a survey showed on Tuesday.
The eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, rose to 44.4 points in June from 44.0 points in May, according to a first estimate, fuelling hopes that the recession may be bottoming out.
However the latest figures remain firmly below the boom-bust line of 50 points -- a score below 50 indicates a contraction -- for a 13th consecutive month in the recession-hit eurozone economy.
"The good news" is that the survey "showed overall improvement for a fourth month running," said Howard Archer, chief European economist at IHS Global Insight.
"The bad news is that the rate of improvement slowed appreciably in June as the services sector suffered a modest relapse and that the surveys still pointed overall to significantly contracting activity," he added.
"The figures are consistent with eurozone gross domestic product (GDP) falling by 0.5-0.6 percent in the second quarter," said Chris Williamson, Chief Economist at Markit.
While rising unemployment has hit demand, particularly in the service sector, "prospects remain positive, however, as confidence in the services economy is the most buoyant for almost two years while manufacturers look set to rebuild inventories in coming months," he added.
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