HOPES for a strong economic recovery in the Eurozone were boosted yesterday by figures showing a rise in retail sales and a two and a half year high in private sector growth.
Data company Markit published its latest composite purchasing managers’ index for the euro area, revealing a score of 53.3 for February.
While all scores above 50 point to economic growth, the number is the highest recorded by Markit for 32 months. The index specifically for the service sector came in at 52.6, up from 51.6 and also at a 32-month high.
“The final PMI indicates that the Eurozone economy grew at the fastest rate since June 2011,” said Markit’s chief economist Chris Williamson. “The survey suggests the region is on course to grow by 0.4 per cent to 0.5 per cent in the first quarter.”
Figures published yesterday in Brussels supported an earlier estimate showing that the euro area grew by 0.3 per cent in the final quarter of last year.
Investors and politicians are hoping that the single currency bloc can gain momentum in 2014 as it looks to recover from a severe downturn.
The prospects of a bounceback were buoyed yesterday by news that retail sales were up 1.6 per cent in the Eurozone in January, compared to December. Compared with one year earlier, retail sales in January were up 1.3 per cent.
However, there remain discrepancies between countries in the Eurozone when it comes to the strength of their economic recoveries.
Markit’s service sector PMI numbers included a three-year high in Italy, where a quarter of decline turned into modest growth in February.
And Germany’s services industry jumped to a two and a half year high with growth of 55.9 in February, up from 53.1.
Yet France’s service sector is still contracting, according to Markit. Its PMI score for February slipped to 47.2 in February, from 48.9 in January – revealing an even steeper rate of decline.
Spain fared better, though, with a score of 53.7 pointing to growth.