The euro zone economy started the second quarter with strong and sustainable growth, according to a survey that shows businesses increased activity at the fastest rate for six years. Ciara Lee reports.
Business activity increasing at its fastest rate in six years and new orders robust - the euro zone economy bounding into the second quarter. IHS Markit's Purchasing Managers' Index composite reading for services and manufacturing hit a figure of 56.7. A reading above 50 indicates growth. Signs the economy is on a sustainable growth path, alongside inflationary pressures, will be welcomed by the ECB. They've struggled for years to achieve either, despite ultra-loose monetary policy. (SOUNDBITE) (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING: "There seems to be decent momentum behind it, particularly in the French number which was disclosed this morning effectively at a seven year high, it's looking reasonably good. So I would anticipate on the back of that, that the ECB, which has actually been quite forthright in playing down speculation of monetary tightening over the next twelve months or so, might have to change its language somewhat in its meeting next Thursday." French business activity beat expectations in April - the news coming just days before an uncertain presidential election. (SOUNDBITE) (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING: "It actually seems as though France has managed to claw its way from its status as the sick man in Europe, to something looking to something looking relatively buoyant. Of course it has got a lot of ground to catch up on other members such as Germany, but right now the real economy does seem to have decent momentum." Germany's private sector grew at a slower pace in April as services shifted into a lower gear. But factory activity remained high, suggesting Europe's biggest economy is likely to carry its upswing into the second quarter.