Eurozone economic activity increased at its fastest rate since the debt crisis in 2011, according to purchasing managers' index (PMI)

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Eurozone economic activity has increased at the fastest rate since before the bloc's debt crisis (Source: Getty)

Economic activity in Eurozone industry in December expanded at the fastest pace since the depths of the currency union’s debt crisis, according to a closely watched indicator.

The Eurozone composite purchasing managers’ index (PMI) – which measures activity throughout the economy – was upgraded significantly to 54.4, after a flash reading of 53.9, despite activity in the services sector falling slightly, according to data compiler IHS Markit.

The figure marks a healthy increase from November’s measure of 53.9. Any reading above 50 indicates an expansion in the economy.

Read more: Eurozone consumer confidence reaches 20-month high

The bloc’s composite PMI measure has remained positive since the end of 2013, as the slow recovery from the Eurozone crisis began.

The data represent good news for the European Central Bank, Europe’s interest rate-setting body, which has remained committed to ultra-loose monetary policy in the hope that the recovery in Europe’s economy will accelerate.

Chris Williamson, chief business economist at IHS Markit said: “The final PMI data signal an even stronger end to 2016 than the preliminary flash numbers, though whether this provides a much-needed springboard for the euro area’s recovery to gain further momentum in 2017 remains very uncertain.

“The survey data are signalling a 0.4% expansion of GDP in the fourth quarter, with growth accelerating in December as business activity rose at the fastest rate for over five-and-a-half years,” he added.

Read more: Euro unemployment below 10 per cent for first time since 2011

The indicator for Germany reached a five-month high of 55.2 (up by 0.2 points) on the back of a healthier manufacturing sector, although the rate of expansion in services fell slightly.

Philip Leake, an economist at IHS Markit said: “Though losing some growth momentum since November’s high, Germany’s service sector finished the year in good shape. Business activity rose solidly, driven by another robust increase in new orders.”

The pace of growth of the Italian services sector was emblematic of the slowing pace across Europe, as it fell by one point to 52.3 in December.

However, France bucked that trend, with services and composite PMI both indicating a strong expansion. The measure reached an 18-month high at 53.1, a strong rise compared to 51.4 the month before.

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