Eurozone recovery hopes raised again

Published Feb. 5, 2013 at 1:18 pm

An homeless sits on a wall in Milan, Italy, Thursday, Jan. 10, 2013. European Central Bank head Mario Draghi says the struggling eurozone should leave recession later this year provided European leaders keep working on economic reforms. Draghi said Thursday at a news conference that some indicators \"have broadly stabilized\" although at low levels. He said that later this year \"economic activity should gradually recover.\" He warned that \"downside risk\" to the economy of the 17 European Union countries that use the euro came from \"slow implementation of structural reforms in the euro area.\" The bank is urging indebted governments to take steps to overhaul labor regulations and improve growth. The bank left its key interest rate unchanged at 0.75 percent, a record low.

Photo by AP Photo/Luca Bruno

LONDON (AP) — Further evidence emerged Tuesday that the economy of the 17 European Union countries that use the euro has started 2013 in far better shape than many people had expected.

Markit, a financial information group, said its monthly purchasing managers’ index for the eurozone economy — a closely-watched gauge of activity that is similar to the Institute for Supply Management’s assessment in the U.S. — rose to a ten-month high of 48.6 in January from 47.2 in December.

Though the index remains below the 50 mark that would indicate expansion, the survey does echo other findings that the eurozone economy may be over the worst. Both main pillars of the eurozone economy, manufacturing and services, are off lows, according to Markit.