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Eurozone economic activity touches six-year high in second quarter


New figures show export orders increase in the eurozone countries

New figures show export orders increase in the eurozone countries

New figures show export orders increase in the eurozone countries

Economic activity in the eurozone touched a six-year high in the second quarter despite suffering a setback in June.

The closely-watched IHS Markit Eurozone purchasing managers index (PMI) rose to 56.4 for the three months to June, up from 55.6 in the first quarter of 2017.

A reading above 50 indicates growth.

It comes as the 19-country bloc endured a mixed performance this month, with manufacturing output motoring to its highest level since April 2011, while services sector activity eased to a five-month low.

Chris Williamson, chief business economist at IHS Markit, said: "Although the PMI data point to some loss of growth momentum in June, the latest reading needs to be looked at in the context of recent elevated levels.

"Despite the June dip, the average expansion in the second quarter has been the strongest for over six years and is historically consistent with GDP growth accelerating from 0.6% in the first quarter to 0.7%."

Overall economic activity in June came in at its lowest level for five months at 55.7, slipping from a joint six-year peak of 56.8 in May.

The performance was underpinned by the slowest growth in new orders for four months as new business within the services sector waned.

However, exports raced to heights last seen in 2011 thanks to a currency boost from the weak euro and robust demand in key markets.

Such was the demand for work that firms continued to take on new staff at the highest rate since 2007, while prices for goods and services were subdued due to the low oil price.

The survey, which informs the regular policy discussions at the European Central Bank, is the latest in a long line of evidence showing the eurozone has moved up the gears over the past few months, amid growing confidence about the future.

Mr Williamson added: "The upturn is also broad-based, with the surveys signalling an acceleration of GDP growth in both France and Germany in the second quarter, as well as across the rest of the region as a whole, albeit with some loss of momentum seen across the board in June."