Manufacturing in euro zone on the roll

By Prieur du Plessis, on August 3rd, 2010 posted in: Economy, Europe

The Euro Zone Manufacturing PMI of 56.7% for July released by Markit yesterday was even better than the earlier flash estimate of 56.5% − a number that surprised on the upside. Despite all the gloom and doom about the prospects for the euro zone, growth of both manufacturing production and new orders accelerated to the fastest growth since April while employment rose at its fastest rate in 26 months.

The manufacturing sector in Greece is still contracting, though, albeit at a reduced rate. However, the manufacturing PMIs in the other three lemons in the euro zone’s basket, Italy, Spain and Ireland, are relatively steady.

Country	Manufacturing PMI
Country	July 2010	June 2010	Trend
Euro zone	56.7	55.6	Higher, expanding
Germany	61.2	58.4	Near previous high, expanding
France	53.9	54.8	Softer, expanding
U.K.	57.3	57.6	Softer, near high, expanding
Greece	45.3	42.2	Higher, contracting
Italy	54.4	54.3	Steady, expanding
Spain	51.6	51.2	Steady, expanding slowly
Ireland	51.4	51.8	Softer, expanding slowly

Source: Markit.

The published PMI data (manufacturing and services) to date suggest that the euro zone economy is on track to grow in excess of 2% in the third quarter compared to a year ago.