Euro-Area Manufacturers Start Year with Near-Record Momentum
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Solid global trade, a recovering labor market and monetary stimulus from the European Central Bank are all supporting the currency bloc¡¯s economy.
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Manufacturing in the euro area grew at one of the fastest paces on record in January, with high demand fueling inflationary pressures.
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A Purchasing Managers¡¯ Index for the sector slipped to 59.6 -- matching a previous flash estimate -- from 60.6 in December, IHS Markit said on Thursday. Companies raised selling prices by the most in almost seven years, partially due to a steep increase in energy costs, the London-based company said.
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Solid global trade, a recovering labor market and monetary stimulus from the European Central Bank are all supporting the currency bloc¡¯s economy, which expanded last year by the most in a decade. While inflation so far has remained muted, policy makers have expressed confidence that price growth will accelerate.
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¡°The euro zone¡¯s manufacturing boom continued in full swing,¡± said Chris Williamson, chief business economist at IHS Markit. ¡°With higher costs being increasingly passed on to customers, the survey sends a warning signal for a potential rise in future consumer price.¡±
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The euro was little changed after the report, before rising to $1.2448 at 11:15 a.m. Frankfurt time.
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Output improved the most in the Netherlands, but also picked up speed in Italy and Greece. While gauges for other euro-area countries slipped, they still signaled strong performances.
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The upturn comes amid a wider pickup in global manufacturing. Asian data published this week continue to point to steady growth momentum, with gauges increasing in Japan and South Korea and a measure for Chinese factory activity remaining unchanged.
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In the euro area, order growth continued to exceed capacity, leading to a near-record increase in uncompleted orders and underpinning business confidence, which jumped to an all-time high, according to the report.
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02 Feb,2018
