Euro zone growth hits six-year high

Optimism ahead of the French presidential election this weekend...

The euro zone has beat forecasts of sluggish April growth to post its highest level of economic activity in six years.

According to IHS Markit's well-regarded economic yardstick, the euro zone economy climbed to 56.7 on the Flash Composite Purchasing Managers' Index (PMI) this month. Up from 56.4 in March, it is the highest reading since April 2011.

With a score above 50 indicating growth, IHS Markit said that its latest PMI data, if maintained, points to second-quarter growth of 0.7%.

This beats the 0.4% predicted in a Reuters poll released on Thursday, which had already given cause for optimism.

Growth accelerated in both manufacturing and services to the highest since April 2011. The former once again recorded the faster pace of expansion.

Job creation likewise remained strong in both sectors, with manufacturing employment rising at a rate not seen since 2000.

'It looks like the upturn has legs'

Speaking to Reuters, Capital Economics chief European economist Jennifer McKeown said:

"April's rise in the euro zone composite PMI adds to evidence that the economy is performing well."

Chris Williamson, chief business economist at IHS Markit, added:

"There is a good outlook for the year – it looks like the upturn has legs. With numbers like these, people are going to start edging up their forecast."

Helping the cause was French business activity roundly trouncing expectations in April, growing at its fastest pace in nearly six years as its citizens prepare to head to the polls this Sunday.

Picture by: NurPhoto/SIPA USA/PA Images

This is despite the uncertainty surrounding the outcome of the presidential election.

On one cautionary note, none of the economists polled by Reuters said far right, anti-EU leader Marine Le Pen would be best for French economic growth, though no major survey sees her winning.

ING chief economist Carsten Brzeski said:

"Even though on the eve of the first round of the French elections a good portion of caution is recommendable, evidence is piling up that the euro zone economy could become the positive growth surprise of the year."

In Germany, factory activity has remained high despite slowing services, suggesting Europe's biggest economy will carry an upswing into Q2.

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