Euro-area factory output expanded for a third month in September as the 17-nation currency bloc’s economic recovery gained momentum.
An index based on a survey of purchasing managers in the manufacturing industry slipped to 51.1 from 51.4 in August, in line with an estimate published on Sept. 23, London-based Markit Economics said today. A reading above 50 indicates growth.
Encouraging indicators have begun to accumulate since the euro area returned to growth in the second quarter, ending a record-long recession. Investor confidence in Germany, Europe’s largest economy, climbed to the highest level in more than three years in September.
Financial markets’ concerns about the integrity of the euro area have diminished sharply, European Union Economic and Monetary Affairs Commissioner Olli Rehn said on Sept. 25. As evidence of investors’ optimism, the Stoxx Europe 600 Index has risen about 8 percent since the end of June and the euro has gained almost 4 percent against the dollar.
Even so, Europe continues to struggle with the legacy of a debt crisis now in its fourth year, with the European Central Bank predicting the bloc’s economy will contract 0.4 percent this year, followed by growth of just 1 percent in 2014.
To help keep market borrowing costs down, the ECB has pledged to keep interest rates low for an extended period after it cut its benchmark rate to a record low of 0.5 percent in May.
Unemployment is at a record rate of 12.1 percent, and analysts predict the jobless rate will remain higher than 12 percent through 2015, according to a Bloomberg Survey.