2014.07.2506:53:37UTC+00Eurozone boosted by service industry

Concerns over a lull in the eurozone’s growth were put to rest on Thursday when results of a survey of economic activity showed an improvement in the region’s industries.

Estimates of the latest purchasing managers’ index (PMI) for July gave it its highest assessment score in three months of 54. The figure is an improvement from June’s 52.8 that puts it further above the 50 level that indicates an expansion. Services provided the largest boost for the PMI whose individual rating rose to a three year high of 54.4 from 52.8 a month earlier. Economists hope that the climbing services industry is an indicator of domestic demand gaining ground once more.

Other businesses included in the PMI survey showed little improvement. Manufacturing ended up at 51.9 from 51.8 in June to indicate companies’ lacking the ability to add on workers.

The European Commission is expected to release its first assessment on the monetary union’s second quarter gross domestic product in mid August. Several financial firms, however, believe that growth in the period was as weak as the first three months of the year with BNP Paribas, Goldman Sachs, and the Royal Bank of Scotland revising down their forecasts to 0.2%.

Contributing greatly to their outlook is the slowdown experienced by the eurozone’s largest economies in Germany and France which offset gains made by its peripheral members such as Spain. Germany’s Bundesbank had earlier admitted that growth is unlikely to be reported for the second quarter while France showed little signs of improving conditions.

Markit’s chief economist Chris Williamson says that, “Part of the weakness can be attributed to geopolitical concerns and notably worries about the potential economic impact of the escalating situation in Ukraine.”