The eurozone economy continued to grow apace in February, according to the latest flash PMI estimates from IHS Markit, released on Tuesday.
“The pace of eurozone economic growth improved markedly to hit a near six-year high in February,” IHS Markit said in a release.
“Job creation was the best seen for nine and a half years, order book growth picked up and business optimism moved higher, all boding well for the recovery to maintain strong momentum in coming months.”
Markit’s composite figure for the eurozone — a reasonable measure of growth in the continent-wide economy — came in at 56 in February.
That was substantially ahead of both market expectations and January’s reading. Those two figures were 54.3 and 54.4 respectively.
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 — (expected 53.7)
- Manufacturing PMI — (expected 55)
- Composite PMI — (expected 54.3)
And here is the chart showing the long term trend:
As is often the case, the month’s strong data was driven by positive February’s for both Germany and France, the eurozone’s two biggest economies. As IHS Markit’s Chief Business Economist Chris Williamson noted:
“The big surprise was France, where the PMI inched above that of Germany for the first time since August 2012. Both countries look to be growing at rates equivalent to 0.6-0.7% in the first quarter. France’s revival represents a much-needed broadening out of the region’s recovery and bodes well for the eurozone’s upturn to become more selfsustaining.”
“The latest PMI data highlighted a further marked improvement in private sector conditions in France. Output continued to rise in both monitored sectors,” Alex Gill, an economist with the firm added.
Here’s how the continent’s largest economies performed:
- French services — 56.7 (expected 53.8)
- French manufacturing — 52.3 (expected 53.5)
- French composite — 56.2 (expected 53.7)
- German services — 54.4 (expected 53.6)
- German manufacturing — 57 (expected 56)
- German composite — 56.1 (expected 54.7)
Germany’s economic performance is so impressive that Samuel Tombs of Pantheon Macroeconomics writes in reaction to today’s release (emphasis ours):
“We are running out of superlatives to describe the German economy, at least in so far as goes the incredible rise in the PMIs. The headline PMI was lifted by a slight increase in manufacturing, and a further rebound in the services gauge following recent weakness. Overall, solid activity in manufacturing remains the key driver of rising private sector growth.”
Trevor Bachlin, a senior economist with IHS Markit added: “The flash PMI results for February signalled the strongest growth of the German economy for just under three years, with manufacturing in particular expanding at a marked pace and services recovering the momentum lost at the start of the year.”