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Eurozone's economic downturn sharply retreats in June

Eurozone's economic downturn sharply retreats in June

Mubasher: The eurozone's economic downturn was lowered for the second consecutive month in June as the lockdown and restrictions imposed amid coronavirus (COVID-19) are continuing to ease, according to the Eurozone Purchasing Managers' Index (PMI) by IHS Markit.

The June survey, which focused on the services and manufacturing sectors in the eurozone, showed a strong improvement in business expectations for the next year.

The flash IHS Markit Eurozone Composite PMI jumped to 47.5 points in June, compared to 31.9 in May and the all-time low of 13.6 in April.

When compared to May, the 15.6-point increase was the largest level in the survey's history. 

However, the downturn in the eurozone's output is ongoing due to the deterioration of the new business inflows for the fourth month in a row. 

Although the job layoffs decreased in both services and manufacturing sectors for the second consecutive month in June, factories are still reducing the number of jobs amid lower operating capacity.

"Output and demand are still falling but no longer collapsing. While the second-quarter GDP is still likely to have dropped at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of lockdown restrictions will help bring the downturn to an end as we head into the summer," Chief Business Economist at IHS Markit, Chris Williamson, commented.