Eurozone enjoys best business quarter for six years
Staff Writer |
A further solid rise in business activity in June rounded off the strongest quarter of economic expansion for over six years, according to flash PMI survey data.
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Although the rate of growth waned to a five-month low, high order book inflows and elevated levels of business confidence meant job creation remained one of the strongest recorded over the past decade as firms continued to expand capacity to meet rising demand.
Price pressures eased, however, largely reflecting lower global commodity prices.
The headline IHS Markit Eurozone PMI fell from a joint six-year high of 56.8 in May to a five-month low of 55.7 in June, according to the preliminary ‘flash’ estimate (based on approximately 85% of final replies).
However, at 56.4, the average PMI reading for the second quarter was above the reading of 55.6 seen in the first three months of the year and was the highest since the first quarter of 2011.
While the June survey showed manufacturing output rising at the steepest rate since April 2011, service sector growth waned to a five-month low, albeit still remaining robust to indicate a broadbased upturn.
Overall new order growth eased to the slowest in four months, reflecting weaker inflows of new business into the service sector.
In contrast, factories reported the highest influx of new orders since February 2011, in part due to strong export sales.
Overall exports (including intra-regional trade) continued to rise at one of the fastest rates seen over the past six years, buoyed by strengthening demand in key sales markets and recent euro weakness.
Companies continued to report rising backlogs of work, which in turn encouraged the recruitment of extra staff at a rate unchanged on May, which was one of the highest seen over the past ten years.
Manufacturing employment growth was just shy of the two-decade high seen in May.
The service sector meanwhile continued to enjoy 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, with optimists continuing to exceed pessimists, albeit to the lowest degree for five months.
A moderation in service sector confidence about the year ahead contrasted with manufacturing optimism hitting a new high. ■