Eurozone business activity rose sharply in June to hit a more than four-year high, which analysts said suggested a better-than-expected recovery in the making despite the Greek crisis. The closely watched Markit Economics Composite Purchasing Managers Output Index (PMI) came in at 54.1 points in June, up from 53.6 in May, for its best performance since May 2011.
Any reading above the boom-or-bust line of 50 points shows the economy expanding. The 19-nation eurozone has been recovering steadily but modestly for the past 18 months as fears Greece could default on its debt and crash out of the bloc have dampened business confidence. Markit Chief Economist Chris Williamson said the latest data suggested the eurozone economy was doing better than expected, with overall growth in the second quarter likely to be in line with the first quarter's 0.4 percent.
That would give a full-year gain of 2.0 percent, a respectable performance after recent weakness, with the upturn broad-based. "Despite the cloud of the Greek debt crisis hanging over the region, the eurozone saw economic growth accelerate," Williamson said.
"The uncertainty generated by the recent escalation of the (Greek) crisis appears to have taken some of the steam out of hiring growth, but employment over the second quarter as a whole has nevertheless shown the largest rise for four years to suggest that - at present at least - the eurozone economy is weathering the Greek storm relatively well," he said. By component, Markit said the index for the services sector-- which accounts for about two-thirds of all economic activity - rose to 54.4 points in June from 53.8 in May, while manufacturing showed a more modest gain to 52.5 points from 52.2.