Eurozone Manufacturing Contraction Slows

Factory activity in the 17-country eurozone shrank more slowly from July to August, thanks in part to improvements in France and Germany, according to preliminary figures from London-based Markit Economics.

Markit's eurozone manufacturing index, which is based on a survey of purchasing managers, rose to 45.3 from a three-year low of 44 in July. A reading below 50 indicates contraction. The firm's factory gauges advanced to 46.2 from 43.4 in France and to 45.1 from 43.0 in Germany.

Markit's composite index for eurozone manufacturing and services edged up to 46.6 in August from 45.5 last month. It was the seventh consecutive month of contraction. The July and August results equate to a 0.5%-0.6% decline in the region's economy from the second quarter, according to the research firm.

Last week Eurostat, the European Union's statistics agency, said economic growth in the eurozone's economy was flat in the first quarter and shrank 0.2% in the second quarter.

Markit says its latest data confirm expectations that the eurozone is sinking into recession in the current quarter. Recession is defined as two straight quarters of economic contraction.