Eurozone growth accelerates, but is 'peaking'

First Published:	23/07/2010 12:19:07
Growth across the 16-nation eurozone accelerated for the first time in three months in July, well-watched research showed on Thursday, but analysts warned of a peaking global trade cycle. The purchasing managers' index (PMI) compiled by data and research group Markit rose to 56.7 in July, from 56.0 in June. Any score above the 50-point line indicates economic growth. London-based Markit said the data indicated a "better-than-expected start to the second half of the year." However, its chief economist Chris Williamson warned that "despite the upturn, inflows of new orders are growing at a pace well below April's peak, in part due to further signs that export growth is slowing as global trade flows cool. "Service providers also provided the most downbeat assessment of future activity for eight months," he added, despite the sector's PMI index rising to 56.0 points from an upwardly-revised 55.5 in June. While the manufacturing index also rose to 56.5 points from 55.6 in June, Paris-based Clemente De Lucia of BNP-Paribas underlined the existence of "growing signs that the global trade cycle in goods and services has peaked, implying lower external demand for the industrial sector." London-based IHS Global Insight analyst Howard Archer acknowledged that the data "boosts hopes that the eurozone will see decent growth in the third quarter after a likely marked pick-up in the second quarter." Nevertheless, Archer agreed that a number of elements "fuel suspicion that eurozone activity will moderate over the coming months even if a double-dip recession looks less of a risk."
Source:  EUbusiness http://www.eubusiness.com

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