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Eurozone Private Sector Growth At 2-Year High

The euro area private sector grew at the fastest pace in just over two years in July due to the relaxation of the coronavirus containment measures, flash survey data from IHS Markit showed Friday.

The composite output index rose to a 25-month high of 54.8 from 48.5 in June. This was also above economists' forecast of 51.1.

The improvement in part reflected a technical rebound from recent lockdowns, as businesses and their customers increasingly returned to work following the further relaxation of Covid-19 containment measures across the region.

The survey showed that output expectations improved in July, and new order inflows picked up and job losses eased.

The flash services Purchasing Managers' Index advanced to 55.1 from 48.3 in June. The expected reading was 51.0.

The flash manufacturing PMI came in at 51.1 versus 47.4 in June and forecast of 50.0.

"The data add to signs that the economy should see a strong rebound after the unprecedented collapse in the second quarter," Chris Williamson, chief business economist at IHS Markit said.

"However, while the survey's output measures hint at an initial v-shaped recovery, other indicators such as backlogs of work and employment warn of downside risks to the outlook," Williamson added.

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