The eurozone economy is on its way to recovery after the disruption caused by the COVID-19 pandemic, as multiple sectors, most notably the services and manufacturing industries, have registered improvements in activity in July, the IHS Markit data provider said on Friday
MOSCOW (Pakistan Point News / Sputnik - 24th July, 2020) The eurozone economy is on its way to recovery after the disruption caused by the COVID-19 pandemic, as multiple sectors, most notably the services and manufacturing industries, have registered improvements in activity in July, the IHS Markit data provider said on Friday.
According to the findings of the firm's Purchasing Managers' Index (PMI) survey, optimism in the service and manufacturing sectors reached a two-year high, with the former registering a score of 55.1, up from 48.3 in June. Any score over 50 indicates that a majority of businesses noted an expansion in activity when compared to the previous month. The manufacturing sector registered a score of 51.1 in July, up from 47.4 in the previous month.
"Companies across the euro area reported an encouraging start to the third quarter, with output growing at the fastest rate for just over two years in July as lockdowns continued to ease and economies reopened. Demand also showed signs of reviving, helping curb the pace of job losses," IHS Markit's chief business economist Chris Williamson said in a report.
Despite the positive signs, Williamson warned that the eurozone's economic recovery was still at risk of further market shocks and an increase in demand would be required to consolidate the recent gains and safeguard jobs.
"The concern is that the recovery could falter after this initial revival. Firms continue to reduce headcounts to a worrying degree, with many worried that underlying demand is insufficient to sustain the recent improvement in output," Williamson said.
After four days of negotiations, the leaders of the European Union member states agreed to a deal to create a COVID-19 economic recovery fund worth 750 billion Euros ($869 billion) on Tuesday. The stimulus package will consist of 390 billion euros in grants and 360 billion euros in repayable loans that will be distributed throughout the bloc.
