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The Eurozone PMIs Are Indicating A Recovery

Today, the Eurozone’s PMI indices were released. PMI means Purchasing Managers’ Index and is the best communicator of the economic climate for the concerned area. Even if it represents a survey of managers working in the manufacturing industry, it tends to represent the whole economy. Why? Because the manufacturing industry is an important segment of any economy which is able to indicate in advance if the economy is going in a good direction or it tends to slow. When calculating this index, five sub-indexes are considered: new orders, inventory levels, production, supplier deliveries and the employment environment. To simplify the understanding of this indicator, you just have to take as a mark the 50.0 level. Above it indicates that the industry is expanding and below it indicates a contraction of the industry.

Back to the news today, the Eurozone reflects a real improvement, reporting levels of the PMI indices that were last met in the middle of 2011. Even if French was the only one who missed the expectations (49.7), indicating a slight contraction, Germany, the European engine, beat expectations (52), as well as the index reflecting the manufacturing industry for the whole Eurozone (51.3).

The world’s economy seems to recover, slowly, as positive signals from the U.S., Europe and China are becomes increasingly evident. On the other hand, should be considered the fact that this recovery is due to be accomplished in the long term and meanwhile important obstacles may occur. Recent data improved the outlook for the biggest economies but put some pressure on the emerging markets as investors are shifting towards the largest economies.

The Eurozone PMIs Are Indicating A Recovery by