Global factory drag eases on euro zone’s rebound
July had seen euro zone’s manufacturing activity expanding mildly, its first growth since early 2019. Meanwhile, Asia was relieved as export-dependent economies eased from declining, hinting that the sector is recovering from the damages brought by the COVID-19 pandemic.
Factories seem to be contributing to euro zone’s potential recovery as IHS Markit’s final Manufacturing Purchasing Managers’ Index for the bloc was monitored at 51.8 in July. The figure placed higher than the 47.4 reading in June, placing above the 50 threshold that separates growth from contraction for the first time since January 2019.
Though there was a 12.1% contraction in the second quarter, the European economy is still likely to record an 8.1% growth during the third quarter, according to a Reuters poll. In addition to this, German manufacturers monitored an expansion for the first time since December 2018, while factory activity in France also recovered modestly.