Euro zone private sector growth beats forecasts in August: PMIs

Thu Aug 22, 2013 4:44am EDT
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By Jonathan Cable

LONDON (Reuters) - Business activity across the euro zone has picked up this month at a faster pace than expected, surveys showed on Thursday, led by Germany as it benefited from growing demand for its exports.

Survey compiler Markit's Flash Composite Purchasing Managers' Index (PMI) bounced to 51.7 from last month's 50.5.

It was the highest reading since June 2011 and beat all predictions in a Reuters poll whose median forecast was for 50.9. Readings above 50 signify expansion in activity.

While growth accelerated in the euro zone's biggest economy, it was a different story in France, the bloc's No.2 economy, which saw business fall as its economy went into a summer lull.

But Markit said the composite PMI, which surveys thousands of companies across the region and is used as an indicator of growth, pointed to a 0.2-0.3 percent economic expansion in the current quarter.

That is similar to a Reuters poll taken earlier this month that predicted growth of 0.2 percent this quarter.

"It's looking good. If the euro zone is picking up then that bodes well for the global economy. The wobble in France is a bit of a worry, but hopefully that will be corrected," said Chris Williamson, Markit's chief economist.

Growth returned to the region's dominant service sector - the services PMI rose above the 50 mark for the first time since the start of last year, coming in at 51.0 after 49.8 in July.   Continued...

Workers are seen at a Vinci construction site in the financial district of La Defense, near Paris August 1, 2013. REUTERS/Benoit Tessier