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The eurozone’s manufacturing sector remained strong in January, as a weak euro helped the health of the sector to its strongest level in almost six years, according to a series of closely-watched business surveys.

IHS Markit’s purchasing managers’ indices for Italy, France and Germany all reported strong performances, with particularly strong job creation figures across the continent.

French businesses reported their strongest growth in more than five years, while German growth also accelerated to a three-year high. Final composite figures for the whole eurozone were higher than initial estimates, at 55.2.

Overall job creation hit its highest level since early 2011, with Spain particularly strong and multi-year highs in France and Germany.

The PMI surveys ask businesses about measures such as orders, hiring and inventories to try and form a picture of the overall health of a sector, and are seen as useful early indicators of economic growth. A headline number above 50 indicates growth during the month.

January’s strong results are likely to reinforce the picture presented by yesterday’s official data releases on growth, inflation and unemployment in the eurozone.

Though they provide another encouraging sign of strength in the economy, the surveys also suggest recent inflationary pressures are likely to continue. Eurozone-wide cost inflation and average charges were both at their highest level in five-and-a-half years, according to the surveys.

Chris Williamson, IHS Markit chief business economist, said:

Eurozone manufacturing is off to a strong start to the year, enjoying its fastest rate of expansion for almost six years in January.

Rates of growth of new orders, exports and employment have all hit multi-year highs, with the depreciation of the euro playing a key role in helping drive new sales in export markets.

Copyright The Financial Times Limited 2017. All rights reserved.
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