BRUSSELS: The eurozone economy grew at its fastest pace in six years in March, as all signs pointed to a recovery “surging higher,” led by France and Germany, a closely watched survey showed Friday.
Data monitoring company IHS Markit also said job creation in the 19-country eurozone recorded its best level for almost a decade.
It said its March Composite Purchasing Managers Index came in at 56.7 points, up from 56.0 points in
February, well above the consensus forecast of 55.8 points from data company Factset.
The PMI measures companies’ willingness to spend on their business and so gives a good idea of how well the underlying economy is performing.
Any reading above the boom-bust 50 points line indicates the economy is expanding.
“The eurozone economy’s throttle opened further in March, with business activity and hiring surging higher,” said Chris Williamson, chief business economist at IHS Markit.
Eurozone growth could amount to 0.6 percent in the first quarter if the trend continues, he said.
The positive data came on the back of France and Germany, which experienced robust growth, mainly in the service sector.
“Perhaps the best news came from France, where growth has risen above that seen in Germany, led by strengthening domestic demand,” Williamson said.
“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 in a statement.
“While elections remain a worry regarding the outlook, for now the business mood in France and across much of Europe is very positive,” he said.
He said the European Central Bank would be encouraged by both signs of stronger growth and inflationary pressure.
But analysts said the data would still not spur inflation and convince the ECB to divert from its controversial stimulus programme to boost prices.
“Policymakers at the ECB are unlikely to be convinced that recent signs of a pick-up in activity will translate into sustained upward pressure on inflation,” said Stephen Brown, European economist for Capital economics.