Tuesday, May 3, 2011

Manufacturing output in the eurozone powered ahead last month but fuelled concerns that a two-speed recovery will leave faltering southern European countries far behind. Output in Germany, France and the Netherlands soared in April, according to analysts Markit, to register the second fastest monthly jump since 2000. Northern European countries dragged up the average after capitalising on a surge in orders from the far east. Recent company results, lead by Mercedes last week, show China spurring a huge rise in demand from European factories for cars and other manufactured goods. Job creation also increased in northern Europe, with Ireland for the first time joining the job recovery in the manufacturing sector. However, a slowdown in orders and rising input prices threaten growth over the rest of the year, said Markit in its monthly report. "The euro area purchasing managers' index (PMI) was boosted by output and new orders both rising slightly faster than indicated by the flash estimates," Markit said. "An acceleration in the rate of increase of output – to one of the fastest seen during the past 10 years – contrasted, however, with a slight easing in growth of new orders.

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