Eu­ro­zone busi­ness ac­tiv­ity strong­est in six years

The Star (St. Lucia) - - BUSINESS -

Szu Ping Chan

Eu­ro­zone busi­nesses en­joyed their strong­est quar­ter of ac­tiv­ity since 2011 in the three months to June, in a fur­ther sign that eco­nomic growth has picked up pace.

A sur­vey by IHS Markit showed pri­vate sec­tor ac­tiv­ity in the bloc's man­u­fac­tur­ing and ser­vices sec­tors re­mained ro­bust in June as com­pa­nies con­tin­ued to hire at a rapid pace to cope with ris­ing back­logs of work.

Man­u­fac­tur­ing em­ploy­ment growth was just shy of the two-decade high seen in May, ac­cord­ing to IHS Markit, as the dominant ser­vices sec­tor ex­tended its best spell of em­ploy­ment growth since early-2008.

"The strong jobs growth was also a re­flec­tion of on­go­ing el­e­vated lev­els of op­ti­mism about fu­ture growth," it said.

While the head­line IHS Markit eu­ro­zone pur­chas­ing man­agers' in­dex (PMI) edged down to 55.7 in June, from 56.8 in May, the read­ing was still well above the 50 level that di­vides growth from con­trac­tion.

It also means the av­er­age PMI read­ing for the sec­ond quar­ter of 56.4 was the high­est since the first quar­ter of 2011

Chris Wil­liamson, chief busi­ness economist at IHS Markit, said the sur­vey sug­gested eu­ro­zone GDP growth was on course to ac­cel­er­ate from 0.6pc in the first quar­ter to 0.7pc in the three months to June.

He said: "The up­turn is also broad-based, with the sur­veys sig­nalling an ac­cel­er­a­tion of GDP growth in both France and Ger­many in the sec­ond quar­ter, as well as across the rest of the re­gion as a whole, al­beit with some loss of mo­men­tum seen across the board in June."

It came as of­fi­cial data showed the French econ­omy grew at a faster than ex­pected pace of 0.5pc in the first quar­ter of 2017, up from a pre­vi­ous es­ti­mate of 0.4pc.

It was the sec­ond up­grade for the eu­ro­zone's sec­ond largest econ­omy in as many months.

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