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February eurozone PMI rises to 70-month high

Xinhua, February 22, 2017 Adjust font size:

The composite Purchasing Managers Index (PMI) in the 19-country eurozone rose to 70-month high at 56.0 points in February, a key business survey showed on Tuesday, suggesting the pace of eurozone economic growth improved markedly.

The reading was greater than the 54.4 points in the previous month, well above the 50-point boom-or-bust line, according to data monitoring company Markit.

"The eurozone economy moved up a gear in February. The rise in the flash PMI to its highest since April 2011 means that GDP growth of 0.6 percent could be seen in the first quarter if this pace of expansion is sustained into March," said Chris Williamson, chief economist at Markit.

The region's two largest economies, Germany and France, both saw similar robust rates in February. The composite PMIs rose to 56.2 in France and to 56.1 in Germany.

Markit pointed out both countries saw new orders rise at the steepest rates since May 2011, propelling employment higher in each case. However, whereas the German upturn was led by manufacturing, it was the service sector that enjoyed the faster growth in France.

Williamson predicted France and Germany will be growing at rates equivalent to 0.6-0.7 percent in the first quarter and hailed France as a "big surprise," where the PMI inched above that of Germany for the first time since August 2012.

"France's revival represents a much-needed broadening out of the region's recovery and bodes well for the eurozone's upturn to become more self-sustaining," he said.

Markit said the forward-looking indicators point to a strong momentum to maintain the eurozone economic recovery in coming months.

The pace of eurozone economic growth improved markedly to hit a near six-year high in February. Job creation was the best seen for nine-and-a-half years, order book growth picked up and business optimism moved higher, it explained.

Meanwhile, inflationary pressures continued to intensify, which will allay the concerns of the eurozone decision-makers.

"The European Central Bank will be cheered by the signs of stronger growth and further upturn in price pressures, though will no doubt remain concerned that elections and Brexit could disrupt the business environment this year," Williamson said, adding that he sees no likely change in policy until at least after the German elections in September. Endit