Eurozone Growth Strongest in Over Five Years

06 January 2006

Eurozone private sector output growth in December rose at its fastest rate since November 2000. Employment levels also increased at their strongest rate for over four years.

The Royal Bank of Scotland/NTC Research Eurozone Composite Output Index, which measures the output of the combined manufacturing and service sectors, rose from 55.1 in November to 56.4 in December.

The latest reading indicates that private sector output is enjoying a sustained uptick, with the rate of growth accelerating for the fourth month running to reach its highest point since November 2000.

Key findings for December 2005 ...

  • New Business
    Having slipped to 53.9 in November, the index bounced back to a 23-month high of 55.5 in December. Demand for goods and services has increased continually for twenty-nine successive months.

  • Employment
    Job vacancies rose for the fourth month running, showing the strongest increase since July 2001 as growing numbers of companies took on more staff to meet rising workloads.

  • Input Costs
    Growth of average input costs accelerated in December, reversing the easing seen in November and recovering to the level seen in October. Companies reported higher energy prices, as well as higher raw material prices and some instances of growing wage pressures - the latter helping to push services input cost inflation to the highest in over a year.
The Purchasing Managers' Indexes provide the earliest indication of business conditions in the Eurozone. The data are based on the results of surveys carried out in Germany, France, Spain, Italy, Austria, Ireland, Greece and the Netherlands (plus the UK, Poland and the Czech Republic for the EU data), covering over 6,000 manufacturing and services companies.

For further information on the Eurozone PMI click here.

Data sourced from NTC Research; additional content by WARC staff