Euro-Area Manufacturing Grows at Fastest Pace in Six Months

(Bloomberg) -- Euro-area manufacturing grew faster than initially estimated in June, recording its best performance this year.

A Purchasing Manufacturers' Index rose to 52.8 from 51.5, slightly higher than the flash estimate of 52.6, Markit Economics said Friday. The results were collected prior to the result of Britain's European Union referendum, which saw the country vote to leave the bloc. Eurostat said in a separate report that unemployment in the 19-nation region fell to 10.1 percent in May, the lowest in almost five years.

“Any Brexit impact is yet to be seen,” said Chris Williamson, chief economist at Markit. “It seems likely that business and consumer spending will be adversely affected across the euro area in the short term at least,”

The figures highlight the challenge facing policy makers as they try to assess the economic fallout from Britain's decision to quit the EU. European Central Bank Vice President Vitor Constancio said this week that while a relatively small trade impact could be magnified by a hit to confidence, the ECB still has the tools necessary to respond to any adverse consequences.

The only nation to show manufacturing in contraction -- a reading below 50 -- was France, which Markit said was likely due to strikes which have disrupted business in recent months. Greece enjoyed a “welcome return to growth,” Williamson said, with its best reading in more than two years.

Euro-area factory growth was led by Germany and Austria, and expansion also gathered pace in Spain, Ireland and Italy.

Joblessness in May was the lowest in Malta, at 4.1 percent. Spanish unemployment fell below 20 percent for fist time in six years.

To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net. To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Jana Randow, Paul Gordon