Business

Eurozone 'sees two-speed economic recovery'

Eurozone flags
Image caption Growth in German manufacturing and the French service sector are helping the eurozone

The eurozone bloc of countries is on track for sustained economic recovery, but there is growing evidence of a two-speed revival, a survey suggests.

Germany and France are outpacing the 17-nation bloc, but periphery nations like the Irish Republic and Greece are struggling, said research group Markit.

Its closely-watched purchasing managers index was 57.8 in April, up from 57.6 in March.

But economists said April's data was flattered by France and Germany.

Any score above 50 indicates economic expansion.

'Faltering demand'

The overall figure was the second best since June 2007, and was helped by strong service sector growth in France and good manufacturing expansion in Germany.

Jonathan Loynes, at Capital Economics, said the data "confirms that economic activity in the region as a whole is still defying the continued problems in the periphery".

Chris Williamson, chief economist at Markit, said: "The euro area's economic growth surge continued into the second quarter. The April survey is consistent with GDP rising at a quarterly rate of 0.8%, the same buoyant pace as signalled for the first quarter".

But he added: "The upturn remains all-too dependent upon France and Germany, with faltering domestic demand limiting growth to only a modest pace outside of the two largest euro nations".

Portugal has become the latest eurozone member to ask for a bailout, following Greece and the Irish Republic, as periphery economies face weak domestic demand, hampered by austerity measures and political uncertainty.

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