French and German private sectors surge in February – IHS Markit

Anything France can do, the Germans can do better.

Germany’s private sector businesses are having a storming month in February, according to an influential survey that has more than matched the impressive performances across the border in France.

Activity in Europe’s largest economy hit a near three-year high according to Markit’s composite indicator of the German private sector which measures output, employment and expectations among businesses.

At 56.1 the composite measure of purchasing manager’s (PMI) came in better than forecasts of around 54.7 and was pushed up by a bumper month for German manufacturers. Any reading above 50 indicates growth.

The country’s factories reported their best month in three years, driven by rising new orders, export growth and employment. Overall, the survey suggests the German economy is in its rudest health for around three years, according to Trevor Balchin, economist at IHS Markit.

Germany’s February PMIs follow on from an impressive month for the French service sector which also reported its best level of activity since 2014 ahead of the country’s crunch elections in April.

Today’s numbers from the eurozone’s two largest economies are further signs of a robust recovery taking hold in the single currency area in recent months. The eurozone managed to usurp the US in real GDP growth terms last year, growing by 1.7 per cent.

(Chart: Bloomberg.)