...as surveys highlight two tier economy in Eurozone

GROWTH in the Eurozone’s economy has accelerated this month despite escalating fears over sovereign debt in several member states.

An initial index reading of business output came in at 57.8 for April, up from 57.6 in March and the second highest since June 2007.

All scores over 50 in the purchasing managers’ index (PMI) indicate economic expansion.

“The April survey is consistent with GDP rising at a quarterly rate of 0.8 per cent, the same buoyant pace as signalled for the first quarter,” said economist Chris Williamson of Markit, which compiles the data.

Job creation across the 17-country single currency area struck a three and a half year high, increasing in both manufacturing and services.

However, yet again the positive figures were largely driven by the booming core economies. In?France, activity spiked from 59.1 to 62.4 – its highest since September 2000. In Germany the PMI printed 59.9.

Elsewhere, growth “remained very modest in comparison, weakening to a three-month low,” the report said, highlighting a near stagnation in the service sector.

Weak domestic demand is hampering growth in economies that do not have strong export sectors, the report said.

Consumer confidence across the whole Eurozone took a further tumble this month, dropping to -11.4 from -10.6 in March, according to a preliminary EU reading released yesterday.

“This is the second deterioration of consumer confidence in a row, now at levels seen in August 2010,” said Barclays Capital’s Françoise Cabau.

Construction data was also released for the Eurozone yesterday, showing a 0.7 per cent monthly fall in February’s output after a 3.6 per cent spike in January.