Eurozone puchasing managers' index rises

Hopes that the eurozone economy is well on the road to recovery rose on Monday with better-than-expected results from a key growth indicator. The Markit Eurozone Composite Purchasing Managers Index for July logged 50.5 points, up from an initial estimate and above the 50-mark signalling growth for the first time for 18 months. The survey of sentiment among thousands of purchasing managers, the people responsible for buying materials and products for businesses, is widely seen as a reliable leading indicator and gauge of economic expansion. In Germany, rates of increase in manufacturing output and service sector activity hit 17- and five-month highs respectively, London-based Markit said. The other main national economies of France, Italy and Spain each registered a further easing of contraction, with solid growth among manufacturers. "The final Output Index reading of 50.5 confirms a welcome return to growth for the eurozone economy at the start of the third quarter, raising hopes that the region can finally claw its way out of its longest-running recession," said Rob Dobson, Senior Economist at Markit. "Granted, the euro area has experienced false dawns before -- but the improvements in confidence and other forward-looking indicators warrant at least some optimism for the outlook this time around." The data comes on the back of a first, minuscule drop in overall numbers of unemployed people for more than two years -- by 24,000 to 19.26 million in June. The eurozone has been seen as the main drag on the world economy over the past couple of years as austerity policies adopted to tame the debt crisis have crippled growth. "The labour market remains the main bugbear of the eurozone, as rising joblessness hurts growth and raises political and social tensions," Dobson added. "But even here there was some better news, with the rate of job cutting easing to a 16-month low."