The upturn was led by Germany, where growth hit a 32-month high, but even Greece recorded an expansion for the first time since August 2009. Spain, too, hit a 45-month high, and the only economy in the survey still in negative territory was France – and even it hit a four-month high and saw a return to growth for new export business.
January marked the first growth in job creation across the zone in nearly two years, with Germany hitting a two-year record for new jobs and Italy recording a 32-month high.
“The Eurozone manufacturing recovery gained significant further momentum in January,” reports Markit’s chief economist, Chris Williamson, “with final PMI readings for Germany, France and the region as a whole all exceeding the earlier flash estimates.
“The survey data indicate that manufacturing output across the Eurozone is growing at a quarterly rate in excess of 1%, led by Germany, where the rate of increase is perhaps as strong as 3%. Encouragingly, France is also showing signs of stabilising, enjoying a welcome return to export growth, though manufacturing in the Eurozone’s second-largest member state remains in overall decline and a drag on the region.
“However, perhaps the most important development in the report is the further revival of manufacturing in the region’s periphery,” Williamson adds. “Both Italy and Spain are seeing robust growth of output and order books, and the Greek PMI’s rise above 50 for the first time since August 2009 is an important signal of how even the most troubled member states are returning to growth.
“The improving economic picture painted by the PMI – which is running at a level consistent with Euro area GDP growth of 0.4-0.5% for the first quarter – takes the pressure off ECB policymakers to add more stimulus,” he concludes. “Price pressures, and the threat of deflation, will no doubt remain a key concern for the ECB, especially as growth of both input costs and selling prices eased in January.”