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Robust Recovery Intact for Eurozone Economy: Markit

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Robust Recovery Intact for Eurozone Economy: Markit

The Eurozone economy expanded at a robust pace in February, led by the sharpest rise in new orders since mid-2011.

Markit Group’s composite gauge of Eurozone business activity decreased 0.2 percentage points to 52.7 in February, slightly below forecasts. The manufacturing PMI index eased from 54 to 53, a two-month low, while a separate gauge of service activity rose from 51.6 to 51.7, a five-month high.

Eurozone business activity expanded for the eighth consecutive month, albeit at a slower pace than in January. The euro area economy is enjoying its strongest and most consistent run since the first half of 2011, led by a surge in new orders growth. New orders rose for the seventh consecutive month and at the fastest pace since June 2011, Markit data showed.

Manufacturing production, which eased slightly from the previous month, remained close to the two-and-a-half year high. This in turn fueled job creation for the second consecutive month. Service activity, meanwhile, increased for the seventh consecutive month, rising at the fastest clip since September 2013. Although service expansion failed to generate an uptake in new staff, employers remained optimistic about the year ahead.

“A dip in the [E]urozone PMI provides a reminder that the region‟s recovery continues to be uneven and fragile,” Markit chief economist Chris Williamson wrote in a statement. “Looking at the latest two months as a whole, the PMI suggests the region is on course to see GDP expand by up to 0.5 [percent] in the first quarter, which would be the strongest growth for three years.”

Business growth continued to be led Germany, which contrasts worryingly with France, the Eurozone’s second largest economy. In Germany, business activity and new orders expanded at the fastest pace since June 2011, while in France overall business activity declined for the fourth consecutive month. Posting yet decline in overall business activity, the French economy risks contracting again in the first quarter.

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