Upbeat eurozone growth data, but French business slump deepens

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Upbeat eurozone growth data, but French business slump deepens

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Further signs have emerged of renewed growth in the eurozone.

Business activity across the region picked up this month at a faster pace than expected.

Surveys of thousands of companies showed Germany led the way, benefiting from growing demand for its exports.

Markit – the organisation that carries out the surveys – said they pointed to economic expansion in the current quarter of 0.2 to 0.3 percent.

The big exception was the eurozone’s second largest economy, France, where the business slump deepened in August for the first time in five months.

That was partly explained by many companies shutting for extended summer holidays.

And Markit said forward-looking survey indicators in France were more positive.

Markit said the data suggested the French economy would contract by 0.3 percent in the third quarter, after official French data showed an unexpected 0.5 percent rebound in the second quarter.

“We’ve got no idea where that (second-quarter GDP) growth is coming from. We can’t see that in the surveys at all and we’re very much scratching our heads,” Markit chief economist Chris Williamson said.

“If there was a rise, we think it’s looking temporary and could fade in the third quarter.”

But overall Williamson was optimistic: “It’s looking good. If the eurozone is picking up then that bodes well for the global economy. The wobble in France is a bit of a worry, but hopefully that will be corrected.”