The European economy just had its best quarter in almost 6 years

The eurozone economy expanded at its fastest pace since the start of 2011 in the first quarter of 2017, according to the latest PMI surveys from IHS Markit, released on Wednesday.

Markit’s composite figure for the eurozone — a reasonable measure of growth in the continent-wide economy — came in at 56.4 in March.

That was substantially ahead of February’s figure of 56.0, but actually marked a fall from the flash estimate of 56.7 released at the end of March.

“Eurozone output and new order growth accelerated to near six-year records in March, rounding off the best quarter for the currency union’s economy since the second quarter of 2011,” an IHS Markit statement said.

The purchasing managers index (PMI) figures from Markit are given as a number between 0 and 100. Anything above 50 signals growth, while anything below means a contraction in activity — so the higher the better.

Here is the full scoreboard of PMIs:

  • Services PMI — 56.o (flash 56.5)
  • Composite PMI —  56.4 (flash 56.7)

And here is the chart showing the long-term trend:

As is often the case, the month’s strong data was driven by a positive March for both Germany and France, the eurozone’s two biggest economies, but Spain and Italy also helped contribute.

As IHS Markit’s Chief Business Economist Chris Williamson noted:

“This is a broad-based upturn among the euro’s largest members, with 0.6% growth signalled for both Germany and France, while Spain looks set to have enjoyed 0.8-0.9% growth in the first quarter, according to the PMI data. Growth has also perked up in Italy during the first quarter despite a slight pull-back in March, with the surveys indicating a 0.3-0.4% expansion.”

Here is how the continent’s largest economies performed:

  • Spanish services —  57.4 (57.1 previous)
  • Italian services —  52.9 (54.2 previous)
  • French services —  57.5 (58.5 previous)
  • French composite — 56.8 (57.6 previous)
  • German services —  55.6 (55.6 previous)
  • German composite —  57.1 (57 previous)

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