Manufacturing activity in the euro zone grew at its fastest pace in over three years last month, and faster than previously recorded, but Greece continued to move in the other direction, surveys showed today.
The Markit Eurozone Manufacturing Purchasing Managers' Index for March leapt to 56.6 from 54.2 in February, beating an earlier flash estimate of 56.3.
The reading, the highest since November 2006, marks the sixth consecutive month it has been above the 50.0 mark that divides growth from contraction. The output index jumped to 59.8 from 57.0 in February, its highest since June 2006.
"The euro zone manufacturing sector has clearly had a very decent start to 2010, suggesting that it will have helped euro zone GDP growth improve in the first quarter," said Howard Archer at IHS Global Insight.
Markets were unmoved on the data.
In Germany, the 16-nation reguin's biggest economy, manufacturing activity grew at a rate not seen in almost 10 years. France, the second biggest, saw its manufacturing sector expand at a pace not seen since November 2006.
Italian manufacturing expanded at a rate not seen in nearly three years and even Spain saw its sector grow for the first time since November 2007.
But not all countries saw growth.
The health of the sector in troubled Greece deteriorated as a slump in new orders, output and employment gathered pace, showing further divergence from its steadily recovering peers.
"A weakened euro combined with rising global demand helped boost export growth," Chris Williamson at Markit said.
Outside the euro zone, British manufacturing activity grew last month at its fastest rate since October 1994, when the economy was also recovering from a deep recession.
Output rose at its quickest pace since July 1994 and new order growth remained near a six-year peak, though a narrow majority of firms shed jobs, the monthly PMI survey from Markit and the Chartered Institute of Purchasing and Supply indicated.
The headline CIPS/Markit manufacturing PMI rose to 57.2 in March from 56.5 in February, a bigger rise than the increase to 56.8 forecast by analysts. February's figure was revised down slightly from 56.6. The index has been above the 50-level that separates growth from contraction since July last year. The figures boosted hopes that GDP figures later this month will show the recovery gathered pace in the first quarter of the year, though there was little reaction on bond or currency markets.
The output component rose to 61.9 in March from 59.8. New order growth slipped fractionally in February, but remained close to January's six-year high due to new product launches and some firms starting to rebuild depleted inventories.
Export order growth fell more markedly from February's series high, but firms still reported a benefit from sterling's weakness versus other major currencies.
Reuters