Eurozone Manufacturing Accelerates

Manufacturing activity in the 17 countries that share the euro quickened in the first month of the year to reach the highest level in nine months on strong German growth, according to The Wall Street Journal. On Tuesday, Markit reported that its purchasing managers’ index (PMI) for the eurozone was up slightly to 57.3 in January, which is the highest point since the sovereign debt crisis flared up in the region last spring. The data also showed that the divergence of leading, core economies and lagging, peripheral nations could be narrowing, with strong domestic demand seen in Spain and Greece and the strongest manufacturing in Ireland in nine months

Markit’s chief economist, Chris Williamson, said the overall PMI gain was “largely driven by external demand,” as exports in France and Germany growing at the fastest rate in more than a decade. However, the report also showed that input prices surged more than five points to 79.2, which is the highest level in almost 15 years of records and increases pressure on the European Central Bank to act to contain price growth. Manufacturing employment grew for the ninth month in a row to reach the strongest growth rate in a decade. Separately, the European Union reported unemployment in the eurozone remained at 10% in December, unchanged from November despite a sharp drop in the number of jobless people.

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