In July, business activity in the Eurozone recorded a slight increase. This is the first time since the beginning of last year in which the EU currency area marks a growth. This is also seen as a significant sign that the zone is coming out of its post-war period economic recession, which is also the longest in its history.
The economy of the Eurozone has been in contraction for nearly two years now. The recent rise of the currency area may be viewed as an indicator of a future uptrend. This economic growth is expected to continue throughout the Q3 2013. If that happens, it will be further boosted by Germany. The country is the largest economy in the zone and it is witnessing positive economic performance for 5 months in a row.
However, the revival of the Eurozone economy is unstable and fragile in the short term . The news for a recovery are accompanied by credit supply restrictions, unprecedented levels of unemployment, as well as the continuing austerity measures in countries which are forced to find a way to decrease the amount of their debts.
Two separate studies on Germany and France lead to a jump in the euro. As a result, Eurozone’s currency saw a performance better than that of the dollar of $1.3255. However, it continued for only a month and the euro dropped again.
Indexes of preliminary purchasing managers revealed that manufacturers have recorded modest expansion rates. However, there was also a clear improvement compared to the past decreases. Nevertheless, service companies did not stop their trend for weakening. Still, their combined index increased from 48.7 to 50.4. In that way it managed to surpass the break even level of 50. The last time this happened was at the beginning of 2012.
One of the main factors behind the recovery is broad-spectrum upswing in the manufacturing sector. This marked the biggest rise in the last two years. The production of goods jumped in countries like France and Germany, as well as the entire region in general.
These figures show that the Eurozone may finally emerge from its contraction as soon as the third quarter of 2013.
