Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

World

Eurozone business activity slips slightly in May

European union flags/FILE

European union flags/FILE

BRUSSELS, May 22- Eurozone business activity slipped slightly in May but held near a three-year high, suggesting a modest economic recovery remains on track, a closely watched survey showed on Thursday.

However the report also highlighted continuing problems for France, lagging further behind powerhouse Germany which goes from strength to strength, analysts said.

“Relatively reassuring for the Eurozone overall but certainly not for France,” said Howard Archer at IHS Global Insight.

Markit Economics said its Eurozone Composite Purchasing Managers Index (PMI) for May slipped to 53.9 points from 54 in April.

The composite indicator was at its second-highest level of the past three years, and the average for the second quarter so far was running at its best since the three months to June 2011 period, Markit said.

Germany was higher at 56.1 points while France fell to 49.3 points, back under again the boom-bust line of 50.

The May services sector PMI hit a 35 month high of 53.5 points, up from 53.1 in April, while the manufacturing PMI fell to 52.5 points, a six-month low, from 53.4 in April.

The report was positive after overall economic growth in the 18 nation eurozone slowed unexpectedly to 0.2 percent in the first quarter, well short of forecasts for 0.4 percent.

Markit chief economist Chris Williamson said the slight PMI easing in May “doesn’t change the picture of a region that’s enjoying its best spell of growth for three years.”

The figures suggest the eurozone economy could grow “0.5 percent in the second quarter after the lacklustre 0.2 percent rise in the first three months,” Williamson said.

Advertisement. Scroll to continue reading.

However, there were two concerns, he said, deflation pressures, where falling prices undercut demand, and a struggling France.

“Of greatest concern is France, living up to its moniker of ‘sick man of Europe’ by sliding back into contraction as Germany continues to enjoy robust growth” at its best since mid 2007, he said.

Archer said the report was “relatively reassuring news for hopes that (a) modest eurozone economic recovery remains intact.”

However, “the eurozone is clearly not finding it at all easy to build up growth momentum,” he said, adding that the European Central Bank remains under pressure to take fresh stimulus measures at its next meeting in June.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Headlines

NAIROBI, Kenya, Mar 16 – The World Bank has given the Kenyan government USD 60 Million (Sh6.1 billion) to help combat the deadly coronavirus pandemic...