‘Green shoots of recovery’ in EU
Article 2 minute read

‘Green shoots of recovery’ in EU

24 July 2013

Green shoots of economic recovery are evident in Europe, with influential survey data showing growth in manufacturing output and the Spanish jobless rate falling for the first time in two years.

Figures from Markit suggest that a recovery may be in sight for parts of the Eurozone economy after the purchasing managers’ index (PMI) came in at 50.4 in July, up from 48.7 in June and the highest level for 18 months. A figure above 50 indicates growth in the market, and although the service sector is still shrinking with a PMI of 49.6, manufacturing output is rising with an index score of 52.3 - a 25-month high.

The figures were released as the National Statistics Institute revealed Spain’s unemployment rate has fallen for the first time in two years, dropping to 26.3% in the second quarter of the year down from a record 27.2% in the first quarter. Despite remaining one of the highest in the EU, it's news that will be welcomed by the government of Prime Minister Mariano Rajoy, which has continued to implement austerity reforms - but argue the recession will soon be over.

Markit’s Chris Williamson said: “The data will provide a summer fillip to policymakers, especially in terms of there being light at the end of the tunnel for austerity-hit periphery countries.”  

As more positive data starts to flow through, there will be a steady reverse in austerity-driven risk aversion to growth tactics, which could signal a new era for the economic bloc toiled by the debt crisis.

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