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EU Economy Running Near 6-Year High    02/21 06:14

   LONDON (AP) -- Economic growth in the 19-country eurozone accelerated in 
February to reach the strongest pace in nearly six years, a closely watched 
survey found Tuesday.

   In its monthly survey of economic activity across the region, financial 
information company IHS Markit also said job creation was the best for nine and 
a half years, as order books and business optimism continued to pick up.

   The firm's purchasing managers' composite output index --- a broad gauge of 
economic activity --- spiked to 56.0 points in February from 54.4 the previous 
month. The index now stands at its highest level since April 2011, which points 
to potentially robust quarterly growth of 0.6 percent in the first three months 
of the year, if sustained in March.

   "The eurozone economy moved up a gear in February," said Chris Williamson, 
the firm's chief business economist. "With inflows of new orders also surging 
and firms becoming even more optimistic about the year ahead, growth could even 
lift higher in coming months."

   The big surprise within the survey was that France appears to be growing 
slightly faster than Germany for the first time since August 2012. Both, 
according to Williamson, are growing at rates of between 0.6 percent and 0.7 
percent in the first quarter.

   "France's revival represents a much-needed broadening out of the region's 
recovery and bodes well for the eurozone's upturn to become more 
self-sustaining," said Williamson.

   France is in focus at the moment ahead of upcoming elections. Opinion polls 
suggest that the race is narrowing. Though they show that far-right 
presidential candidate Marine Le Pen would be ahead in the first ballot, she 
still trails potential rivals in the subsequent runoff.

   Political uncertainties abound in the eurozone this year. In addition to the 
French election in April/May, there are national polls taking place in the 
Netherlands next month and Germany in the autumn. In light of last year's vote 
in Britain to leave the European Union and Donald Trump's victory in the U.S. 
presidential election, there are concerns that a populist tide may sweep 
continental Europe, too.

   Given the uncertainties, few in the markets think the European Central Bank 
will soon bring an end to its stimulus efforts to revive the eurozone economy.

   Still, another potential bright spot for policymakers at the ECB was the 
survey's finding that inflation appears to be rising from dangerously low 
levels previously.

   "The ECB will be cheered by the signs of stronger growth and further upturn 
in price pressures, though will no doubt remain concerned that elections and 
Brexit could disrupt the business environment this year," said Williamson.

   "No change in policy therefore looks likely until at least after the German 
elections in September."


(KA)

 
 
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