Eurozone manufacturing growth at 6-year high

The recovery across the eurozone’s manufacturing sector continued in April, according to a series of closely-watched business surveys, which showed growth rising to another post-crisis high.

The final reading of IHS Markit’s purchasing managers’ index surveys gave a reading of 56.7, slightly below the flash reading of 56.8 but still strongly above the previous month’s 56.2 and the 50 level that indicates growth.

The bloc’s three largest economies helped to drive the growth, with France, Germany and Italy all at or near six-year highs.

France’s “resurgence” continued despite uncertainty around the presidential election, with businesses reporting high levels of new orders and taking on new staff for a sixth consecutive month.

Italy, meanwhile, marginally beat forecasts with a reading of 56.2, and growth in the currency area’s largest economy faded only slightly, with Germany’s total slipping 0.1 from March’s six-year high to 58.2.

However, Greece still showed little sign of benefiting from the positivity in the rest of the eurozone. Greek manufacturers reported their eighth successive month of falling output, with the country’s sub-index falling to 46.7 as exports declined.

The PMI surveys question firms on measures such as orders, hiring and inventories to give a picture of the overall health of different sectors, and are seen as useful early indicators of economic growth.

Chris Williamson, IHS Markit chief business economist, said:

Eurozone manufacturers reported buoyant business conditions in April, signalling an encouragingly solid start to the second quarter. Production, order books and exports* all grew at the fastest rates for six years, fuelling one of the largest increases in factory jobs in the 20-year history of the survey.

Optimism about the year ahead meanwhile appears unaffected by political worries, with the first four months of 2017 seeing confidence remaining elevated at the highest level since the future output series started in 2012.