Euro zone businesses had a solid start to the second quarter of the year with activity picking up at its fastest pace in almost three years, surveys showed on Tuesday, suggesting a broad-based recovery is taking hold in the bloc.
While Germany continued to lead the upturn, businesses in Spain and Ireland grew at their fastest pace since before the financial crisis.
Survey compiler Markit said the Composite Purchasing Managers' Index pointed to second-quarter growth of 0.5 percent, which would be the strongest in three years.
The data will come as a relief to the European Central Bank, which has so far shrugged off calls for extra stimulus through another interest rate cut or outright asset purchases.
The ECB is expected to keep its key policy rates on hold when it meets next week, according to economists polled by Reuters, who also said euro zone inflation had fallen as far as it would go at 0.5 percent in March. <ECB/INT>
The Composite PMI, widely seen as a good gauge of growth, rose to 54.0 in April, as expected by economists, from March's 53.1. It has held above the 50 mark that divides growth from contraction for 10 months in a row.
Burgeoning new orders provided the boost, with the related sub-index rising to a 35-month high of 52.7 in April, while firms took on staff at the fastest pace since September 2011.
"The final PMI confirms … the euro zone started the second quarter with the fastest growth seen for three years," said Chris Williamson, chief economist at Markit.
"The most exciting news is the strong upturns that are becoming apparent in Spain andIreland, where the rates of growth rose to the fastest for seven and eight years respectively."
Price rises remained muted, although the survey showed a slight acceleration in input cost rises which, coupled with the accelerating recovery, may ease concerns about disinflation.
The index for the euro zone's vast service industry rose to a 34-month high of 53.1 in April from 52.2 in March thanks to a surge in new business to its highest since June 2011 and a slight rise in employment.
Services business activity in France, Germany, Italy, Ireland and Spain all grew together for the first time since May 2011.
– Detailed PMI data are only available under license from Markit and customers need to apply to Markit for a license.