The currency bloc is growing at its strongest pace since early 2011
The eurozone economy started to “sizzle” in November, as leading surveys showed that the currency bloc is growing at its fastest rate since early 2011.
The euro area purchasing managers’ index (PMI) climbed 0.5 points to 54.4, beating the 53.9 expected by analysts. Any number above 50 would suggest that private sector companies are expanding.
Chris Williamson, chief economist at Markit, which compiles the PMI data, said that the figures showed “a welcome acceleration of eurozone growth”.
The report signalled that the eurozone GDP would grow by 0.4pc in the final quarter of the year. Growth of 0.5pc could be achieved “if we get even a modest uptick in December”, Mr Williamson said.
Claus Vistesen, of Pantheon Macroeconomics, said that the number was “sizzling”, and confirmed that there was now a healthy recovery in the eurozone. “The services sector continues to do the heavy lifting, but manufacturing activity also firmed and new business growth rose in both sectors.”
Germany yet again helped to buoy the wider 19-country currency union, as companies enjoyed their strongest monthly gains in new business orders for two years.
However, analysts believe the improvement in the European outlook is unlikely to stall the European Central Bank’s plans to provide the eurozone with greater monetary stimulus.
Central bank watchers believe that Mario Draghi, the ECB president, could unveil both interest rate cuts and an expansion of an existing eurozone quantitative easing programme next week.
“With recent comments highlighting how the central bank remains disappointed with the strength of the upturn at this stage of the recovery, November’s slightly improved PMI reading will no doubt do little to dissuade policymakers that more needs to be done,” said Mr Williamson.
The Markit survey showed signs of “ongoing deflationary pressures”, linked to a fall in commodity prices.
The French economy could stand to benefit from looser ECB policy after the November PMI showed that business activity rose at the slowest pace in three months.