The economic downturn that has drastically affected the Eurozone showed signs of easing in May, but a continuing lack of demand for European goods from both within and without the Eurozone is likely to keep the region in recession until the end of the year.
Markit’s flash Eurozone Services PMI data saw services and factory output increase more than economists had forecast rising to 47.7 from the 46.9 recorded in April. Economists had been predicting a rise of 47.2. A reading below 50 indicates contraction. Despite the improvement it means that the PMI has now spent 16 consecutive months below the 50 mark that divides growth and contraction.
“We see the Eurozone being out of recession in the third quarter,” said Christian Schulz, senior European economist at Berenberg Bank in London. “We’ve seen improving confidence since the ECB provided a safety net, and the risk of countries having to leave the Euro has decreased. Also austerity is fading.”
Despite economist optimism the region remains entrenched in its longest recession since the Second World War. The nations on the Eurozone’s periphery are slowly showing improvements but of more concern are the continuing weakness of France and the weakness of Germany.
“There are signs the rate of decline is easing, which do suggest we may be moving into a period of stabilisation, but it’s taking a lot longer than most people anticipated,” said Chris Williamson, chief economist at Markit.
“It’s looking more like the end of the year (until) we’re going to see the numbers start to show signs of stabilising.”
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2885
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8550
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3306
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5956
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7771
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1698
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7485
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6241
(Correct as of 11:25am GMT)