Eurozone business index shows fresh gains

Flash estimates of business activity in the eurozone show growth in manufacturing and service businesses in August, a private research firm said. Markit Economics said Thursday the flash estimate of the purchasing managers index for service-oriented businesses, which could be revised later, rose to 51 in August from 49.8 in July. That represents a 24-month high for the index, Markit said. The manufacturing PMI rose from 50.3 in July to 51.3 in August, a 26-month high, and the manufacturing output PMI rose to 53.4 from 52.3, a 27-month high, Markit said. The composite PMI for the region rose from 50.5 in July to 51.7 in August. A flash estimate is based on incomplete data, leaving it subject to a possible revision. Markit said the composite PMI rose for the fifth consecutive month and has remained in positive territory for two months "in contrast to declining business levels over the prior 17 months." That implies that, while growing for two months, businesses in the eurozone still have to make up for lost ground to reclaim levels they were at prior to the recession. While the new orders index for manufactured goods rose for the second consecutive month, the index measuring the number of employees fell for the 20th consecutive month with rates of job losses "accelerating slightly in both manufacturing and services compared with July," Markit said. "The euro area's economic recovery gained momentum in August," said Markit Chief Economist Chris Williamson. "So far, the third quarter is shaping up to be the best that the euro area has seen in terms of business growth since the spring of 2011," he said. Further, he said, "the data flow continued to improve outside of France and Germany," which have the two largest economies in the eurozone. New data suggests, "that a long-awaited recovery seems to be taking shape in the periphery,'" he said referring to countries, like Greece, Spain and Portugal that were hit hardest by the economic downturn.