Italian manufacturers lead the way in another bumper month for the eurozone

There’s still plenty of legs in the eurozone’s recovery.

A key business survey from the bloc’s manufacturing sector reported its highest level of activity in six years last month, led by Italy which notched up its best performance since the eurozone’s sovereign debt crisis in 2011.

IHS Markit’s purchasing managers’ index, which measures everything from output to employment levels in the factory sector, accelerated from 55.4 to hit 56.2 in March – unchanged from a flash reading (any figure above 50 indicates growth).

Survey data such as the PMIs and consumer confidence reports suggest robust growth in the 19-country bloc at the start of 2017 – helping the continent finally gain momentum after years of sluggish growth since its debt crisis hit in 2010.

Italy’s performance will be particularly encouraging as it has long lagged behind its major rivals in Germany and France. Manufacturing accounts for 15 per cent of the Italian economy, which is the eurozone’s third largest.

Germany, Europe’s traditional growth driver, powered ahead again in March, with manufacturing activity also at its highest level since 2011 at 58.3.

Greece however remained the bloc’s laggard, as its manufacturing sector contracted on the back of another roadblock in the country’s bailout talks, heightening uncertainty and hitting employment levels.

Chris Williamson, chief economist at IHS Markit, said Europe’s factory were enjoying a “sweet spell”, but warned that businesses were reporting “growing pains” from rising inflation and supply delays.