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Recovery in Euro Zone Gathers Pace Recovery in Euro Zone Gathers Pace
(about 1 hour later)
PARIS — The economy of the euro zone expanded this month at its fastest rate in nearly three years, according to a private sector survey released on Wednesday, with accelerated output from Germany leading the bloc.PARIS — The economy of the euro zone expanded this month at its fastest rate in nearly three years, according to a private sector survey released on Wednesday, with accelerated output from Germany leading the bloc.
Markit’s composite index of economic activity, based on a survey of purchasing managers across the 18 nations that use the euro, rose to 54 in April from 53.1 in March — the strongest growth since May 2011. It was the tenth consecutive month of increase.Markit’s composite index of economic activity, based on a survey of purchasing managers across the 18 nations that use the euro, rose to 54 in April from 53.1 in March — the strongest growth since May 2011. It was the tenth consecutive month of increase.
A reading of 50 or higher signals growth, while a level below 50 suggests contraction. Economists had been expecting an index reading of about 52.9.A reading of 50 or higher signals growth, while a level below 50 suggests contraction. Economists had been expecting an index reading of about 52.9.
Subindexes showing manufacturing and service sector activity also rose. Analysts watch the indexes carefully, considering them to be among the best “real-time” guides to the euro zone economy.Subindexes showing manufacturing and service sector activity also rose. Analysts watch the indexes carefully, considering them to be among the best “real-time” guides to the euro zone economy.
“The upturn continues to be led by Germany,” Chris Williamson, Markit’s chief economist, said in a statement.“The upturn continues to be led by Germany,” Chris Williamson, Markit’s chief economist, said in a statement.
But the best news, he said, might be found in the so-called euro zone “periphery,” where economic growth “is gaining traction.”But the best news, he said, might be found in the so-called euro zone “periphery,” where economic growth “is gaining traction.”
The French economy continued to expand in the latest survey, but at a slowing pace, raising worries that it will tip back into stagnation.The French economy continued to expand in the latest survey, but at a slowing pace, raising worries that it will tip back into stagnation.
The euro zone’s economic recovery, which dates to the second quarter of 2013, has had little impact on the unemployment crisis, with around 26 million people in the European Union looking for jobs, according to Eurostat, the bloc’s official statistical agency.The euro zone’s economic recovery, which dates to the second quarter of 2013, has had little impact on the unemployment crisis, with around 26 million people in the European Union looking for jobs, according to Eurostat, the bloc’s official statistical agency.
The report Wednesday showed a “modest” improvement in the labor market, the first since May 2011, Markit said.The report Wednesday showed a “modest” improvement in the labor market, the first since May 2011, Markit said.
Signs of continuing improvement in the bloc are welcome news for the global economy, amid geopolitical tensions in Eastern Europe and the prospect of slowing growth in emerging markets.Signs of continuing improvement in the bloc are welcome news for the global economy, amid geopolitical tensions in Eastern Europe and the prospect of slowing growth in emerging markets.
The report followed a separate release earlier Wednesday by Markit and HSBC suggesting that China’s manufacturing sector shrank again in April, a worrisome indicator for one of the engines of global growth.The report followed a separate release earlier Wednesday by Markit and HSBC suggesting that China’s manufacturing sector shrank again in April, a worrisome indicator for one of the engines of global growth.
The euro zone recovery also faces threats from low inflation, as the annual rate of growth in consumer prices fell to 0.5 percent in March from 1.7 percent a year earlier. The rate, the lowest since 2009 and far below the European Central Bank target of just under 2 percent, has many European officials worried that subdued price increases will put a dent in any employment gains and make it harder for euro zone countries like Greece or Italy to reduce their huge debts.