Business optimism reaches three-year high in eurozone

Thumbs up hopeBusinesses in the eurozone expressed more optimism in February than in any of the three-a-year surveys conducted by researcher Markit since 2011.

Manufacturers and service providers in the eurozone forecast growth in business activity, while job hiring intentions were the strongest in three years and output prices were forecast to rise at their fastest rate since 2011.

However, optimism among eurozone companies still lagged behind UK and US companies on average, despite recent disappointing economic data in the US.

“Recoveries in the US, eurozone, UK and Japan are looking increasingly sustainable, with companies set to boost their capital spending and hiring at the fastest rates since the financial crisis alongside the brighter outlook,” says Chris Williamson, chief economist at Markit.

Optimism in business was higher in the UK than any other country in the survey except Brazil, according to the survey, with hiring and capital expenditure expected to rise along with an increase in selling prices. Japan had the lowest confidence rating among developed countries in the survey, with service providers' confidence subdued. However, employment and expenditure were expected to rise.

“It’s a different picture in the emerging markets, however, where the survey suggests we should not be expecting pre-crisis economic growth rates to return any time soon,” says Williamson. “Instead, policies are likely to be needed to revitalise growth in key emerging markets, especially if liquidity is drained from the financial system.”

The Markit Global Business Outlook survey is produced in February, June and October and based on a survey of about 11,000 companies.

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