The eurozone’s recovery is looking “increasingly robust”, according to a closely-watched set of business surveys, which showed activity in the bloc’s manufacturing sector hitting its highest level in almost six years in February, with Italy in particular beating expectations.
The overall manufacturing purchasing managers’ index for the eurozone came in at 55.4, a slightly below flash estimates made last month but still the best reading since early 2011.
The PMI surveys, compiled by IHS Markit, question firms on measures including order, hiring and inventories to give a picture of the overall health of a sector. A headline number above 50 indicates expansion during the month, with the results seen as useful early indicators of economic growth.
Italy recorded its strongest result since December 2015, with a reading of 55.0, comfortably ahead of the 53.5 predicted by economists.
Job creation among Italian respondents also accelerated, while optimism for the year ahead hit a six-month high.
Second readings from France and Germany were both slightly weaker than initial estimates, though still firmly in growth territory. Germany’s powerhouse industrial sector showed its strength once again with the biggest improvement in reported operating conditions since May 2011. Respondents reported a particularly strong rise in employment, while businesses remained optimistic for the year ahead.
Beleaguered Greek businesses, in contrast, still failed to benefit from strength in the wider currency area, with survey respondents reporting their sixth consecutive month of falling output.
Chris Williamson, IHS Markit chief business economist, said:
Companies clearly expect the good times to persist. This year has seen firms more optimistic about the future than at any time since the region’s debt crisis. Companeis are reporting stronger demand in both home and export markets, with the weakened euro providing an accompanying tailwaind to help drive sales.