Business growth in the Eurozone hits fastest pace in seven months
Business activity in the Eurozone grew at the fastest pace in seven months in February, a new survey has shown.
According to the “flash” reading of the Markit Eurozone purchasing managers’ index – an early estimate of the survey data, calculated a week before the final results - the composite output index rose from 52.6 in January to 53.5.
Having almost stalled back in November, business growth in the Eurozone has accelerated for the last three months, largely thanks to a sharp increase in demand, while new orders also grew at the fastest pace for seven months in February.
However, the rise in demand meant companies struggled to cope with the inflow of new business, which led to backlogs of uncompleted orders rising for the first time since April and registering their biggest increase since May 2011.
“February’s PMI surveys paint an upbeat picture of improving Eurozone economic health,” said Markit chief economist Chris Williamson.
“Undeterred by the ongoing Greek debt crisis, economic growth is gathering momentum and looks set to gain further traction in coming months.
“The economy is on course to grow by at least 0.3% in the first quarter, assuming March doesn’t disappoint.”
In Germany, growth accelerated for the third month in a row even though manufacturing output declined slightly and employment growth was sluggish even if German service sector firms took on staff at the fastest rate since December 2011.
France saw business growth at the fastest rate since August 2011 and registered the first rise in employment since 2013.
“With the ECB’s quantitative easing ‘bazooka’ due to start in March, business optimism has been boosted to its highest for three-and-a-half years,” said Williamson.
“Growth is looking lop-sided, however, and very much dependent on the services economy where lower prices are fuelling growth, especially in consumer-facing sectors.
“The weakness of the manufacturing economy remains a major concern.”