Eurozone Business Decline Slows As Lockdown Eases – PMI Survey
Private sector economic activity in the eurozone shrank further in June but the rate of decline has slowed compared to the height of the coronavirus lockdown, IHS Markit said Tuesday.
The firm’s closely-watched PMI index rose to 47.5 points from 31.9 in May and a historic low of 13.6 in April but was still below the key 50 points level, which represents a contraction.
“Output and demand are still falling but no longer collapsing,” said Chris Williamson, chief business economist at IHS Markit.
“While second quarter GDP is still likely to have dropped at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of lockdown restrictions will help bring the downturn to an end as we head into the summer.”
Jessica Hinds, European economist at independent analysts Capital Economics, said the survey “suggests that while the GDP outturn will undoubtedly be dreadful, it will not be as catastrophically bad as we had feared.”
Of the 19-nation single currency zone’s largest players, France actually moved into positive territory but giant Germany’s weaker score held the average down.
“Overall, today’s data provide some reassurance that the economy is getting back on its feet,” Hinds said.
“But with some restrictions still in place and fears of a second wave lingering, it will be some time before activity returns to pre-virus levels.”
As the coronavirus outbreak swept the world in the first half of 2020, eurozone countries and their main partners in the rest of the EU and Britain, imposed lockdowns.
Many businesses and social and cultural life ground to a halt, hammering the economy, but the measures have been credited with getting the epidemic under control.
Governments are now moving — with caution and at varying rates — to return life to normal, hoping to revive businesses and travel in time for the summer tourism season.