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Major European economies are bounding back from the initial coronavirus slump as they ease lockdowns and reopen business, according to a closely-watched set of business surveys.
The UK, Germany, France, and the wider Eurozone’s manufacturing and service sectors are showing signs of marked improvement as output levels are returning to those seen prior to COVID-19, IHS Markit’s Composite Purchasing Managers’ Index, which surveys business leaders in the economy, showed.
“Demand also showed signs of reviving, helping curb the pace of job losses.”
The PMI is a common gauge to measure business performance and economic direction of trends in an economy.
During economic downturns, readings as low as 45 are generally considered poor, while during expansion PMIs tend to linger in the mid-50s range. During the worst of the crisis, some European PMIs feel to as low as 10.
But they now seem to be bouncing back.
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IHS Markit, INSEE via Datastream
IHS Markit’s Composite PMIs recorded for July 2020:
“The strong bounce in PMIs in the UK and Europe this morning, led by the services sector, is a welcome sign that optimism and activity continue to improve as the economies transition out of lockdown,” said Dean Turner, an economist at UBS Global Wealth Management.
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