(Bloomberg) -- Economic momentum in the euro area surged to the fastest pace in almost 12 years, pushing firms to pile on the most additional workers since the start of the millennium.
A composite Purchasing Managers' Index rose to 58.8 in January from 58.1 in December, IHS Markit said. That unexpectedly beat the previous flash estimate of 58.6, with the revision driven mainly by better-than-expected momentum in the service sector, led by Germany.
The region's expansion has been underpinned by a pickup in global trade, steadily declining unemployment, and ultra-low borrowing costs from the European Central Bank. As companies continue to accumulate orders that push them to the limits of their capacity, IHS Markit says the rapid pace of job creation - - the fastest since late 2000 -- is likely to help growth become less dependent on monetary support.
“The strong upturn is also broad-based, which adds to the potential for the growth to become more self-sustaining,” said Chris Williamson, chief business economist at IHS Markit. “If such impressive numbers continue to be seen in coming months, expect policy makers to sound increasingly hawkish.”
ECB officials are currently considering when to discuss winding down their extraordinary stimulus measures, which include negative interest rates and a bond-buying program.
Eurostat data showed that euro-area economic growth accelerated 0.6 percent in the fourth quarter of last year. London-based IHS Markit says that will likely be adjusted to 0.8 percent in line with a recent trend for upward revisions to gross domestic product.
The growth in services and manufacturing contributed to greater price pressures, with input costs and output charges rising at the steepest rates since mid-2011.
To contact the reporter on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net.
To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net.
©2018 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
