Eurozone manufacturing rises at fastest pace since April 2011 - Markit

Markit's final purchasing managers' index increased to 57.0 from 56.7 in April, in line with the flash reading. A reading over 50 indicates expansion.

Growth in output and new orders accelerated to the best levels in around six years, underpinning the strongest job creation in the 20-year survey history.

The acceleration was driven mostly by Germany, where the rate of increase was the fastest in over six years, rising to 59.5 from April's 58.2 and a tick higher than the flash estimate of 59.4.

Solid upturns were also recorded in other countries such as the Netherlands, Austria, Spain, Italy and Ireland, and although France was lagging behind, it still enjoyed its best quarter in six years. Greece was the only country to signal contraction, but the rate of decline was moderate.

Chris Williamson, chief business economist at IHS Markit, said: “The eurozone upturn is developing deeper roots as factories enjoy a spring growth spurt. Demand for goods is growing at the steepest rate for six years, encouraging manufacturers to step up production and take on extra staff at a rate not previously seen in the two-decade history of the PMI survey.

“The fact that the upturn is being accompanied by such strong jobs growth sends a signal that increasing numbers of companies are moving away from a focus on cost cutting towards investing in expansion, underscoring the elevated levels of business optimism seen across the region. The record hiring adds to the sense that the upturn is looking more and more robust as each month goes by."

Pantheon Macroeconomics said: "Overall, eurozone output and new orders growth increased to a six-year high, which helped push employment growth to a 20-year high. The second estimate of Q1 eurozone GDP next week likely will show that manufacturing investment was one of the main drivers of the strong headline, and the PMI suggest the momentum will be sustained in Q2."