Cost inflation mars strong eurozone PMI

24 February 2011
Growth spurt by Eurozone manufacturing PMI
Eurozone growth reaches three-month high
Germany steams ahead of eurozone slow coaches

Eurozone PMI shows growth, but at slowest rate for a year

European manufacturing hits 10-year high

24 February 2011 | Lindsay Clark

Input prices in manufacturing across the eurozone reached their highest level for nearly 14 years this month.

Higher food, energy, fuel, metals and other commodity costs were widely reported among buyers, the Markit Flash Eurozone Purchasing Managers’ Index for February shows. The survey found the input price index - where a figure above 50 indicates growth - scored 85.7 during February.

The rising costs are set against a backdrop of strong growth in the eurozone economies. The composite output index - based on around 85 per cent of usual monthly responses - rose from 57.0 in January to 58.4 this month. This figure signals the strongest monthly expansion in the region since July 2006, the research firm said.

The data also revealed that while growth continued to be driven by Germany, expansion in more peripheral eurozone nations was picking up and the differences between economies in the bloc were starting to narrow.

Chris Williamson, chief economist at Markit, said: “Faster eurozone growth was accompanied by a further surge in price pressures in February. The jump in rates charged for goods and services was the largest recorded by the survey, highlighting the speed with which prices are being driven higher by rising food, oil and other commodity prices.”

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