Eurozone Increases Manufacturing Output, Led By Germany and Italy

Euro zone manufacturing rose in July, led by Germany, the Markit/CIPS Purchasing Manager’s Index indicated on Thursday. July’s numbers rose for the fourth straight month, edging above 50 for the first time since January 2012. Numbers above 50 indicate growth.

In Germany, growth hit a five-month high and job creation was the highest since March, Markit said.

Italy also had a strong month, coming in at 50.4 on the PMI Index. The country saw its sharpest increase in new export orders since April 2011. “July saw the manufacturing PMI edge into expansion territory for the first time in two years,” Markit economist Phil Smith said. He cautioned that low employment and “muted domestic demand for goods” might fuel doubts about the sustainability of the recovery.

In France, output has been falling since March 2012 but the rate of decline slowed in July. Employment also fell but it was the least amount since April 2012.

Despite having its second month in a row of rising orders, Spain’s data was weaker at 49.8. PMI's Spain expert Andrew Harker said the rise in orders “wasn’t yet enough to encourage firms to raise their output or employment in July… Manufacturers therefore showed a preference for allowing backlogs of work to build up.”

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