Eurozone economic growth highest since 2011

The euro area economy gathered further growth momentum at the end of 2017, spurred on by a near-record expansion of manufacturing production and the steepest increase in service sector activity for over-six-and-a-half years.

The final IHS Markit Eurozone PMI Composite Output Index posted 58.1 in December, up from 57.5 in November, to register its highest reading since February 2011.

The headline index has signalled growth for 54 successive months, with the average level during quarter four the best since the opening quarter of 2011.

Ireland remained at the top of the national output PMI growth league table in December, seeing its rate of expansion accelerate to the fastest for 21 months. France saw its pace of output growth remain close to November's high, putting it in second position overall. Rates of output expansion improved in Germany (80-month record), Italy (eight-month high) and Spain (three-month high).

The trend in new business also strengthened in December. Manufacturers saw the steepest increase since April 2000, underpinned by improved domestic demand and near-record growth in new export orders. Service providers, meanwhile, registered the fastest increase in new work for over a decade.

The positive economic environment led to improved business confidence in the euro area. Optimism rose to its best since September, after strengthening to a joint-record high in Germany and three-month highs in France, Spain and Ireland.

Rising new order intakes and an associated accumulation of backlogs of work encouraged firms to take on additional staff in December. The pace of job creation matched November and was the joint-highest seen during the past 17 years. Employment increased in Germany, France, Italy, Spain and Ireland.

Upward price pressures abated slightly in December, with rates of increase in input costs and output charges both easing for the first time in five months. The pace of inflation signalled for each price measure remained strong relative to their long-run trends, however, and among the steepest seen over the past six-and-a-half years.