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IHS Markit's Manufacturing Purchasing Managers' Index for the
euro zone rose to 57.4 in June, up from May's 57.0 and pipping
the preliminary reading of 57.3.
June's reading was the highest since April 2011 and was
comfortably above the 50 level that separates growth from
contraction.
An index measuring output, which feeds into a composite PMI due
on Wednesday, jumped to 58.7 from 58.3 - a level not seen in
over six years.
"Euro zone manufacturing growth gained further momentum in June,
rounding off the best quarter for just over six years," said
Chris Williamson, chief business economist at IHS Markit.
Suggesting the momentum will continue into the second half, new
orders rose at the fastest rate since early 2011, backlogs of
work increased at the fastest pace in over 13 years, raw
materials were depleted and factories increased headcount at a
near record pace.
That meant manufacturers were at their most optimistic for at
least five years. The future output index, which gauges
expectations, soared to 67.4 from 66.0 - the highest level in
the sub-index's history.
"There's no sign of the impressive performance ending any time
soon. The manufacturing sector is clearly in expansion mode and
looks poised for continued robust growth in coming months,"
Williamson said.
The upturn came alongside factories increasing prices, as they
have done for nine months, welcome news to policymakers at the
European Central Bank who have been battling for years to get
inflation to their 2 percent target ceiling.
Inflation was a stronger-than-expected 1.3 percent in June,
official flash data showed on Friday, and while still below
target the strong economic data of late meant ECB chief Mario
Draghi last week raised the prospect of policy-tightening.
(Reporting by Jonathan Cable; Editing by Toby Chopra)
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