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Homeeurope economyEuro zone businesses roar towards year-end: PMI

Euro zone businesses roar towards year-end: PMI

  • All three headline PMIs above all forcasts in Reuters polls
  • Forward-looking indicators point to busy December
  • PMI points to Q4 GDP growth of 0.8 percent – IHS Markit

Euro zone business growth is roaring as the year draws to a close, a survey showed on Thursday, supporting the European Central Bank's move last month to announce a throttling back of its monetary stimulus.

Surveys covering both the services and manufacturing industries outshone even the most optimistic forecasters in Reuters polls – indicating growth is broad-based – with factories having the second best month in the index's history.

An employee works on an engine production line at a Ford factory on January 13, 2015 in Dagenham, England.Carl Court | Getty Images News | Getty Images

The bloc has emerged as the surprise economic star of 2017, with growth rates outpacing its peers, and future-looking indicators in the latest Purchasing Managers' Index (PMI) suggest the upturn still has momentum.

IHS Markit's composite flash PMI for the euro zone jumped to 57.5 this month, its highest since April 2011 and smashing the median forecast in a Reuters poll for no change from a final October reading of 56.0. Anything above 50 indicates growth.

"We thought we had reached a peak a few months ago, so this is a surprise. This is a very broad-based looking upturn," said Chris Williamson, chief business economist at IHS Markit.

December looks like it will be busy, too. A new business index rose to 56.9 from 56.6, a near seven-year high and so Williamson said the PMI, if maintained, points to fourth quarter growth of 0.8 percent, outstripping the 0.5 percent predicted in a Reuters poll earlier this month.

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