Eurozone growth edging higher at the start of second quarter

Cheryl Sanders
April 22, 2017

IHS Markit Economics' composite PMI reading of Eurozone growth rose to 56.7 in April, up from 56.4 in March and the highest tally in six years.

The Japanese Yen gained ground, after overnight data revealed that Japan's flash Nikkei manufacturing PMI jumped to a two-month high level of 52.8 in April, underpinned by a stronger export performance, thus highlighting solid growth in the nation's manufacturing sector.

PMIs at theses levels, Williamson said, were consistent with economic growth of about 0.7 percent, which would be a significant acceleration from the 0.4 percent growth posted in the final quarter of previous year.

"Job creation. rose to the highest for nearly a decade as firms boosted operating capacity in line with buoyant demand and widespread optimism about future prospects", it said in a statement.

Price pressures remained elevated, with both input prices and those charged for goods and services holding close to their six-year highs.

Share with Us - We'd love to hear eyewitness accounts, the history behind an article, and smart, constructive criticism. The rise in employment that has accompanied the economic expansion is also shoring up the recovery by encouraging consumers to spend.

By contrast, activity slowed in Germany, the only eurozone economy larger than France.

"With numbers like these, people are going to start edging up their forecasts", said Chris Williamson, chief business economist at IHS Markit. France is even outperforming Germany's, the region's biggest though both economies are growing at rates not seen in six years, the firm said.

On Sunday, French voters go to the polls to see who will contest the second round of the presidential election on May 7. The economic resilience is slowly pushing the European Central Bank toward a discussion about an exit from its unprecedented stimulus, which it has pledged to keep in place until at least the end of this year.

However, a survey in Britain suggested that the recovery seen since last June's Brexit vote is weakening.

On the economic front, United Kingdom retail sales posted their biggest quarterly fall in seven years during the first three months of 2017. Retail sales including automotive fuel decreased 1.8% month-on-month in March, reversing a 1.7% rise in February.

Kate Davies, the agency's senior statistician said price increases appear to be behind the retail sales reverse. Though that's helped exporters pick up business, it has pushed up inflation by raising the cost of imports such as food and energy.

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