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Europe is growing at the fastest pace in four years

Hollande merkelREUTERS/Alessandro GarofaloGermany’s Chancellor Angela Merkel (L) talks with French President Francois Hollande during the Asia-Europe Meeting (ASEM) in Milan October 16, 2014.

Europe’s PMI (purchasing managers index) scores are out this morning — they’re the closely-watched private sector business surveys that signal the strength of the economy in any given month.

And the signals from Europe (France aside) are pretty good this morning. Businesses are signalling the strongest growth in nearly four years.

Here are the figures we’re had. Remember, anything over 50 signals growth, and anything below signals contraction

  • France composite PMI at 51.7 (down from 53.4 in February) — services matched expectations but manufacturing fell short.
  • Germany composite PMI at 55.3 (eight month high, from 53.8 in February) — both manufacturing and services beat forecasts.
  • The eurozone composite PMI at 54.1, the strongest in four years (from 53.3 in February) — both services and manufacturing were stronger than expected

It’s only the flash reading, so we don’t have information on other countries yet — but Germany and France are the two biggest economies in the bloc, and often provide a good indication of the economic climate.

The basic story is that Germany’s growth still seems to be firming. Germany’s growth surprised to the upside in the fourth quarter and it looks like it may be solid again in the first quarter of this year.

Claus Vistesen at Pantheon Macroeconomics had this to say about France’s figure: “The composite PMI remains consistent with moderately positive growth in France, but this survey also continues to indicate that a sluggish industrial sector is holding the economy back.”

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