Eurozone economy expands in August: purchasing survey

BRUSSELS, Sept 3, 2009 (AFP) - The eurozone economy expanded in August for the first time after 15 months of business contraction, a closely-watched revised survey showed on Thursday.

The final purchasing managers' index (PMI) for the 16 countries which use the euro single currency, compiled by data and research group Markit, rose to 50.4 points in August from 47 points in July -- crossing the 50-point line that indicates economic activity returning to growth.

It marks the first time that the index has entered positive territory since May 2008.

"The PMI index suggests that the eurozone may well come out of recession in the third quarter," said economist Rob Dobson of Markit in a statement.

The rebound was led by a first rise in manufacturing output in 15 months, the researchers said, with the services sector nearing base level also.

A resurgence of output in manufacturing and service in Germany, plus manufacturing output in France, was cited as the principal driver.

"It was no surprise to see Germany and France leading the charge, but the continued weakness of Italy, Spain and Ireland are major concerns and make the rebound heavily reliant on the big two," added Dobson.

He said that sales were still dependent on heavy price discounting and government stimulus meausures.

"Too rapid a removal of these supports could still halt the recovery, especially if the labour market fails to rebound sufficiently beforehand."

Source: AFP

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