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Eurozone ends 2017 high amid record manufacturing growth

Staff Writer |
The eurozone economy picked up further momentum at the end of 2017, with December seeing the fastest growth of business activity for nearly seven years.

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The best factory output and order book gains since 2000 pushed the manufacturing headline PMI to a record high, while an upturn in service sector to growth to the highest since early-2011 underscored the broad-based nature of the current surge in activity.

Job creation stayed at the highest for just over 17 years and price pressures remained elevated, albeit easing slightly during the month. The headline IHS Markit Eurozone PMI rose to 58.0 in December, according to the ‘flash’ estimate (based on approximately 85% of final replies), up from 57.5 in November and its highest since February 2011.

The upturn continued to be led by manufacturing, where the headline PMI rose to its highest since the series began in June 1997.

Faster manufacturing output growth (the best since April 2000) was accompanied by the largest monthly improvement in service sector activity since April 2011.

Activity rose in response to higher inflows of new orders, which showed the biggest monthly increase for just over a decade.

In manufacturing, the largest upturn in new orders since April 2000 was buoyed by export orders rising at a rate only marginally below November’s record high.

Growth of new business in the service sector was meanwhile the joint-highest in over a decade, highlighting the broad-based improvement in demand.

Future expectations also improved, perking up in both sectors and reviving after two months of decline.

Buoyant job creation was again seen as firms boosted capacity in line with strong demand and the improved outlook.

Measured across both sectors, employment growth was the joint-highest since September 2000, matching November’s recent peak.

A record gain in factory payrolls helped offset a slowing in services job creation, albeit with the latter still the second-best in the past ten years.

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