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Eurozone manufacturing near three-year peak

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Eurozone manufacturing near three-year peak

April PMI report indicates business expansion, employment gains.

Growth of business activity in the euro area economy accelerated to its fastest for just under three years in April, leading to a return to job creation across the region. The Markit Eurozone PMI Composite Output Index rose from 53.1 in March to 54.0 in April, according to the “flash” estimate, which is based on around 85% of total survey replies.

The latest reading was the highest since May 2011.

The PMI has now been above the 50.0 no-change level for ten consecutive months, signaling a continuous expansion of business activity since last July. With new orders also growing in April at the fastest rate seen since May 2011 and backlogs of work showing a small increase for the second consecutive month, further growth of activity is likely in May.

“The upturn continues to be led by Germany, where the economy looks to be growing at a quarterly rate of approximately 0.7%."

The upturn was again led by goods producers, though also continued to be supported by rising activity in the services economy. Manufacturing output increased for a tenth straight month, showing the second-largest rise since April 2011 as growth accelerated for the second month running. Growth of manufacturing new orders eased slightly for a third straight month but remained robust, aided by a marginal uptick in growth of new export orders.

Services activity meanwhile increased for the ninth month running, growing at the fastest rate since June 2011. The increase was spurred by the largest rise in new business inflows seen over that period.

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