The Eurozone starts 2018 with the fastest pace of economic growth in 12 years, adding to the biggest increase in new jobs since 2000, according to the latest IHS Markit survey. The Eurozone Purchasing Managers’ Index (PMI), which is eagerly awaited by market analysts, rose to 58.6 points in January, which is its highest level since June 2006. The average forecast was down to 57.9 points after the final figure of 58.1 points in December 2017.
The services sector contributes most for the good data of the Eurozone. Although new business orders declined in January compared to December, their volume is still the second largest from July 2007.
The good data on the PMI is another positive indicator for January, which makes economists believe that growth in the Eurozone will be above expectations in 2018.
The industrial PMI declined in January to 59.6 points against 60.6 in December, on the background of forecast for a slower downward trend of 60.63 points. However, it should be borne in mind that by the end of 2017, the business activity in the industrial sector marked a record high in the history of this study.
At the same time, the service performance index rose surprisingly to 57.6 points from 56.6 points a month earlier and expectations for 56.4 points. This value of the index is the highest level since August 2007.
The companies in January are also more optimistic for the current year, with business expectations reaching an eight-month high. On the background of strong growth in new business orders and improved prospects for development, the companies continue to employ workers. The employment in industry has remained at its recent record as the number of people employed in the service sector has reached its level since October 2007.
The study also takes into account the continued large-scale new production orders, resulting in opening new jobs at the fastest rate since 2000. This implies that consumer spending will continue to make an important contribution to economic growth over the coming months.
The German total PMI index dropped to 58.8 in January, but after it hit an 80-month high in 58.9 points in December. At the same time, French analogue index rose to 59.7 points from 59.6 points a month earlier, thus remaining close to its six and a half yearly peak in November from 60.3 points.