Eurozone growth surges as Covid restrictions ease
Business growth accelerated across the Eurozone in February, a closely-watched survey showed on Thursday, as Covid-19 restrictions eased.
The IHS Markit Eurozone PMI Composite Output Index came in at 55.5 compared to 52.3 in January, the strongest increase in combined manufacturing and services output since last September. Rates were equally strong across the both sectors.
Among individual countries, the Composite PMI for Germany - the bloc’s biggest economy - reached a six-month high of 55.6, although that was below the flash reading of 56.2.
Ireland’s composite PMI was 59.1, Spain’s 56.5, France’s 55.5 and Italy’s 53.6.
Costs continued to rise significantly, however, with the increase in prices charged for goods and services surging to a survey-record. Input costs increased at a faster rate for the second consecutive month.
The rate of inflation was the second-quickest on record behind November 2021, IHS Markit said.
Chris Williamson, chief business economist at IHS Markit, said: "The survey data for February depict a Eurozone economy that was regaining robust growth momentum ahead of the invasion of Ukraine. Business activity accelerated to a pace commensurate with GDP growth in excess of 0.6%, buoyed by a relaxation of virus restrictions.
"Covid containment measures were eased, driving a revival in spending on consumer-facing services in particular.
"However, business activity continued to be a constrained both by supply chain bottlenecks and labour shortages, meaning a sellers’ market persisted for many goods and services."
He concluded: "With inflation risks rising and growth prospects waning, the Ukraine conflict adds to business and household headwinds for the coming months, and exacerbates the difficult juggling act of the European Central Bank in controlling inflation while sustaining a robust economic recovery."
The surveys were sent to a panel of around 5,000 manufacturing and services firms across the bloc, with data collected between 10 and 23 February.