The euro zone’s manufacturing boom slowed a little further last month but factories across the bloc still appear to be enjoying their best growth spell in almost two decades, a survey showed on Thursday.
Evidence the recovery remains robust and widespread, alongside price pressures at a near seven-year high, will be welcomed by policymakers at the European Central Bank as they move closer to unwinding their ultra-easy monetary policy.
IHS Markit’s final manufacturing Purchasing Managers’ Index for the euro zone fell to 58.6 in February from 59.6, just pipping an earlier flash estimate of 58.5 and comfortably above the 50 mark that separates growth from contraction.
An index measuring output, which feeds into a composite PMI due on Monday fell to 59.6 from 61.1, but was also above its flash estimate.
“The average PMI for the first quarter so far is the second-highest since the spring of 2000, falling just short of the near-record peak seen in the fourth quarter of last year,” said Chris Williamson, chief business economist at IHS Markit.
“The broad-based nature of the upturn is especially welcome, with all surveyed countries reporting solid rates of expansion.”
That robust growth came despite a sub-index measuring output prices rising to 58.4 from 58.0, its highest reading since April 2011.
“Widespread cases of demand exceeding supply highlight the ongoing presence of solid underlying core inflationary pressures,” Williamson said.
However, euro zone inflation slowed to a 14-month low in February, official data showed on Wednesday, underlining the ECB’s caution in removing stimulus despite growth exceeding expectations.
Prices across the bloc rose 1.2 percent last month, a long way below the ECB’s 2.0 percent target ceiling.
Source: Reuters (Editing by Toby Chopra)