Light at the end of the tunnel for the beleaguered eurozone emerged today as
economic powerhouse Germany showed signs of dragging the region out of its
double-dip recession.
The latest snapshot of the eurozone's manufacturing and services firms
revealed a much shallower economic decline than feared during the first half
of December, fuelling hopes that the region is over the worst effects of a
debt crisis lingering for nearly three years.
The European Commission had been braced for the eurozone, the UK's
biggest export market, to remain in recession until the second half of 2013.
But today's industry surveys from financial data provider Markit signalled the
downturn may have reached its deepest point in October, raising prospects of
an earlier-than-expected recovery.
"A return to growth is looking like an increasing possibility in the
first half of next year, barring any surprises, if the recent improvements in
the survey data can be sustained," Markit chief economist Chris Williamson
said.
The figures showed Germany is the main driver of the upturn after its
fastest growth for six months, in contrast with the lingering problems in
struggling southern countries like Spain and Italy. Confidence, while low by
the standards of before the financial crisis, has picked up for the fourth
month in a row, particularly in Germany and France.
The more upbeat news comes as China also provided cheer as the world's
second-biggest economy enjoyed its strongest manufacturing performance in more
than a year.
The manufacturing purchasing managers index, a closely watched barometer
of its economy, hit a 14-month high in December.
ING Bank economist Martin van Vliet said: "It is premature to assume that
a return to sustained growth is just around the corner. That said, the
improved conditions on financial markets and the pick-up in global growth
momentum, as signalled by the further pick-up in the Chinese PMI, should
steady the pace of decline from here on."
Distributed by MCT Information Services
