Eurozone’s economic growth near six-year high: survey

Survey findings showed increases in orders for business, exports and hiring

March 27, 2017
The Canadian Press
The Canadian Press

Image: Thinkstock

LONDON—Businesses across the 19-country eurozone, and particularly in France, are increasingly upbeat and hiring more people despite big uncertainties—including France’s high-stakes presidential election.

A closely watched survey of some 5,000 companies indicates that business activity is growing overall at the fastest rate in over six years.

The purchasing managers’ index, which serves as a gauge of business activity, rose to 56.7 points in March, from 56 in February, confounding expectations for a modest decline. The index, published Friday by data providers IHS Markit, is on a 100-point scale, with 50 separating contraction from growth.

The findings showed increases in orders for business, exports and hiring—a key point for a region with unemployment still close to 10 percent.

Business activity in France reached the highest since May 2011, even surpassing that of Germany, despite concern that the country’s right-wing, anti-euro National Front party is likely to do well in the presidential election.

“While elections remain a worry regarding the outlook, for now the business mood in France and across much of Europe is very positive,” said Chris Williamson, economist at IHS Markit. “The eurozone economy’s throttle opened further in March.”

He said the data indicates that the eurozone economy grew 0.6 per cent in the first quarter compared with the previous three months.

There is evidence that wages are on the rise, as well as prices. That will be welcome news to the European Central Bank, which has a big stimulus program in place to bring inflation up to healthier levels.