The euro zone manufacturing sector returned to growth at the start of the third quarter, with production and new orders both increasing at the fastest rates since mid-2011. Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) rose to a two-year high of 50.3 in July, up from 48.8 in June and above the neutral 50.0 mark for the first time since July 2011. The PMI was also above the earlier flash estimate of 50.1.
Among the nations covered by the survey, Ireland's manufacturing PMI signalled growth for the second straight month in July, while PMIs for Germany, Italy and the Netherlands all edged back into expansion territory.
Meanwhile, euro zone manufacturing output rose for the first time since February 2012, underpinned by the first growth in new order volumes for over two years. New export orders also posted a slight increase following June's marginal decline.
Rob Dobson, senior economist at Markit, said, "The PMI rose to a two-year high, as rising export demand and stabilising domestic markets took growth of new orders and output to rates, albeit still modest, last scaled in mid-2011. This hopefully places the sector nicely to provide a positive spur to the third quarter GDP numbers and help the euro area exit recession."
