Eurozone manufacturing growth hits six-year high

The eurozone manufacturing sector continued to recover in April, expanding at its fastest pace in six years, according to figures released on Tuesday.

IHS Markit's final manufacturing purchasing managers' index came in at 56.7, up from March's reading of 56.2 and just a tick below the flash estimate of 56.8.

A reading above 50 signals expansion, while a reading below points to contraction.

Underpinning the gain in the level of the eurozone manufacturing PMI were stronger rates of expansion in output, new orders and faster job creation. Longer supplier delivery times also had a positive effect on the PMI level.

In France, the manufacturing PMI printed at 55.1 in April, up from 53.3 in March and above the long-run series average of 51.2.

In Germany, meanwhile, the PMI nudged just a touch lower to 58.2 from March's 71-month high of 58.3.

Chris Williamson, chief economist at Markit, said: “Eurozone manufacturers reported buoyant business conditions in April, signalling an encouragingly solid start to the second quarter. Production, order books and exports all grew at the fastest rates for six years, fuelling one of the largest increases in factory jobs in the 20-year history of the survey.

"The latest survey readings indicate that manufacturing is growing at an annual rate of approximately 4-5%, which should make a significant contribution to overall economic growth. Companies are benefitting from the historically weak euro, improved growth in key export markets, rising domestic demand and ongoing central bank stimulus including record-low interest rates."

Pantheon Macroeconomics said "the eurozone manufacturing is in rude health, and had a strong start to the second quarter".