May's Royal Bank of Scotland/NTC Report on the Eurozone - the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) within the twelve nation euro currency area - records the largest rise for over five years in employment growth.
The report data, which covers both the manufacturing and service sectors, inevitably raises concern about inflationary pressures.
Key findings for May 2006:
This rose at its fastest pace since August 2000, reaching 59.0 and signalling an acceleration of growth in output for the ninth month running. Manufacturing showed the stronger rate of increase for the third successive month, though again only by a small margin.
- New Business
This index signalled an increase in demand for goods and services for the thirty-fourth consecutive month, with the rate of increase dipping only marginally from the five-and-a-half year peak seen in April. Incoming new business in the service sector showed the largest monthly rise since September 2000 but growth of manufacturing new orders dipped slightly, in part due to a moderation of export sales growth.
Growing backlogs of work indicated the largest rise in outstanding business yet recorded by the survey and the ninth successive monthly increase. Employment rose at the sharpest rate since January 2001, increasing for the ninth consecutive month as net job creation accelerated in both the manufacturing and service sectors.
Average input price inflation jumped higher in May, accelerating to the strongest since October 2004, primarily as a result of higher energy prices. Secondary factors included higher commodity prices in manufacturing and some signs of growing wage pressures in services. Average prices charged accelerated to a new series high in May. The rate of inflation hit a three-and-a-half year series high in manufacturing and a five-and-a-half year high in services.
Data sourced from NTC Economics (UK); additional content by WARC staff