Eurozone growth pulls back from near 12-year high but remains elevated
Staff Writer |
Eurozone business activity continued to rise at a steep pace in February, albeit with the rate of expansion cooling from the near 12-year high recorded in January.
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Price pressures and employment growth also remained elevated, though likewise saw rates of increase ease slightly.
Business optimism about the coming year meanwhile ticked higher.
The headline IHS Markit Eurozone PMI fell from 58.8 in January to 57.5 in February, according to the estimate, which is based on approximately 85% of usual final replies.
The slower growth of business activity reflected an easing in the rate of increase of new orders which, while elevated, slipped to a five-month low.
By country, growth in Germany came in at a threemonth low, while in France the composite PMI moderated to the weakest for four months.
However, in both cases the PMI readings remained at levels indicative of strong growth, close to recent seven-year highs.
Business activity growth meanwhile also slowed across the rest of the eurozone, though still registered the second-largest expansion in nearly 12 years.
At the eurozone level, the goods-producing sector continued to record a faster pace of expansion than the service sector, though growth of output and new orders slowed in both cases.
However, both sectors continued to enjoy the best periods of expansion seen for seven years.
Despite slowing, the sustained growth of new business was sufficiently strong to encourage companies to boost staffing levels to one of the greatest extents seen over the past 17 years.
Service sector jobs growth remained at the jointhighest in a decade, while manufacturing payroll growth dipped further from recent 20-year record highs to a five-month low.
Backlogs of work continued to rise, indicating that firms on balance once again lacked sufficient capacity to meet demand.
The increase was nonetheless the smallest for six months, reflecting the combination of recent hiring and slower inflows of new work.
Price pressures meanwhile remained elevated.
The rate of input cost inflation and selling price inflation remained at levels exceeded only rarely since early-2011, dipping from January’s highs. ■