Economic activity in the eurozone returned to growth in July after easing restrictions to stop the spread of the coronavirus pandemic (COVID-19), according to a study by financial analysis firm Markit.

The euro area Composite Purchasing Managers (PMI) indicator, which measures activity in industry and the services sector, rose to 54.8 points in July from 48.5 points the previous month, according to an estimate by Markit. It is the highest level since mid-2018 and exceeds analysts’ expectations of 51.1 points.

A PMI indicator of over 50 points shows an expansion of the economy, and below the value of 50 points the indicator reflects a contraction of the economy, according to Agerpres.

“Eurozone companies got off to an encouraging start in the third quarter, with production registering the fastest growth rate in two years in July after easing restrictions and reopening economies,” said Chris Williamson, chief economist at Markit.

The new business index rose to 52.7 points in July from 47 points the previous month, the highest level since October 2018, suggesting that the recovery will extend into August, although there are fears that layoffs will continue.