Eurozone factories back to solid growth for first time since 2011

MANUFACTURERS in the euro area saw the strongest growth for over two years last month, with Spain’s factories growing for the first time since early 2011.

According to Markit’s manufacturing purchasing managers’ indexes (PMI), this is the fourth month of growth for the Eurozone’s producers overall, and the first for the embattled Spanish economy since 2011.

The Eurozone’s headline figure for August was 51.4, with any number over 50 indicating growth. The Netherlands recorded 53.5 and Germany’s score rose to 51.8.

Perhaps more significantly, Spanish and Italian factories posted robust readings, at 51.1 and 51.3 respectively. Greek manufacturing also shrank at the slowest speed for nearly four years. Berenberg’s Holger Schmieding commented: “Growth at the periphery will make all debt sustainability calculations look much better.”

There was no change from the 49.7 score registered by French manufacturers earlier in July, signalling a mild contraction. Markit’s chief economist Chris Williamson added: “The upturn is broad-based, with PMIs rising in all countries with the exception of France, where business conditions have at least stabilised.”