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Spain's manufacturing activity 'stable' in June | |
(about 1 hour later) | |
Spain's manufacturing activity recorded its strongest reading for more than two years in June, suggesting the sector's long contraction may have stabilised. | |
An rise in new orders pushed Spain's purchasing managers' index (PMI) up to 50, from 48.1 in May. | |
The monthly industry survey provides a snapshot of industry conditions and a reading above 50 indicates growth. | |
Meanwhile, separate data showed that the eurozone unemployment rate reached 12.1% in May, its highest level ever. | |
Unemployment across the 17-countries, according to the European Union statistical agency, was just above April's figure of 12%, which had been revised down from an earlier estimate of 12.2%, making May's figure the new record. | Unemployment across the 17-countries, according to the European Union statistical agency, was just above April's figure of 12%, which had been revised down from an earlier estimate of 12.2%, making May's figure the new record. |
Other economic data released by Eurostat on Monday showed inflation in the eurozone rose to 1.6% in June, from 1.4% in May. | Other economic data released by Eurostat on Monday showed inflation in the eurozone rose to 1.6% in June, from 1.4% in May. |
June's figure is comfortably below the European Central Bank's target of 2%. | June's figure is comfortably below the European Central Bank's target of 2%. |
European Union leaders held a summit last week which put joblessness at the top of its agenda, and agreed to launch a special scheme for young jobless Europeans. | European Union leaders held a summit last week which put joblessness at the top of its agenda, and agreed to launch a special scheme for young jobless Europeans. |
'Encouraging note' | 'Encouraging note' |
The PMI survey suggested conditions in the manufacturing sector were stabilising across the eurozone, with the reading for the bloc as a whole rising to 48.8 - 16-month high, albeit still below the 50-level that marks the difference between expansion and contraction. | |
However, Germany's reading fell following a drop in new orders. | However, Germany's reading fell following a drop in new orders. |
June's PMI reading for Spain was the first time in 26 months the index has reached 50, indicating that the country's manufacturing sector may have bottomed out following a prolonged contraction. | |
The figures are compiled by research firm Markit, and they were hailed as a promising sign by Markit's senior economist, Andrew Harker. | |
"The second quarter of 2013 ended on an encouraging note for the Spanish manufacturing sector, with PMI data pointing to a rise in new business," he said. | "The second quarter of 2013 ended on an encouraging note for the Spanish manufacturing sector, with PMI data pointing to a rise in new business," he said. |
However, the country's manufacturing sector accounts for just 12% of its total economy, and Mr Harker said growth was coming from exports with little sign of improved domestic demand. | However, the country's manufacturing sector accounts for just 12% of its total economy, and Mr Harker said growth was coming from exports with little sign of improved domestic demand. |
Spain has been among the worst-hit economies by the eurozone crisis. It has not seen significant growth for five years and has high unemployment. | Spain has been among the worst-hit economies by the eurozone crisis. It has not seen significant growth for five years and has high unemployment. |
Growth engine | Growth engine |
In Germany, a fall in orders pushed its manufacturing PMI reading down to 48.6 in June, from 49.4 in May. | In Germany, a fall in orders pushed its manufacturing PMI reading down to 48.6 in June, from 49.4 in May. |
Germany's manufacturing sector accounts for about 20% of its economy and has helped it to become the best-performing economy in the eurozone. | Germany's manufacturing sector accounts for about 20% of its economy and has helped it to become the best-performing economy in the eurozone. |
The country had been able to offset weakness in the bloc, where it traditionally sells the biggest percentage of its goods, by sales to faster-growing places, such as China. | The country had been able to offset weakness in the bloc, where it traditionally sells the biggest percentage of its goods, by sales to faster-growing places, such as China. |
But despite making cuts to its prices, weaker economic growth there has been curbing demand and Germany came close to recession this year. | But despite making cuts to its prices, weaker economic growth there has been curbing demand and Germany came close to recession this year. |