European services, manufacturing companies ride export boom

ZURICH: Europe's services and manufacturing industries expanded faster than initially estimated in December, suggesting exports are helping power economic growth in the region.

A composite index based on a survey of euro-area purchasing managers in both industries held at 55.5, the same as in November, London-based Markit Economics said on Wednesday. It had previously reported a reading of 55 for December. A figure above 50 indicates expansion. In Germany, the region's largest economy, a services gauge was also revised higher in December.

German exports have helped bolster the region's expansion as countries from Ireland to Spain struggled to push down budget deficits and restore investor confidence. In the US, the world's largest economy, manufacturing growth accelerated to the fastest pace in seven months in December and MAN, Europe's third-largest maker of commercial vehicles, said on December 17 that full-year truck deliveries may exceed its forecast.

"It's very welcome news to see the German economy continuing to perform well," said Howard Archer, chief European economist at IHS Global Insight in London. "The concern is that, going forward, euro zone economic activity will be pressurised increasingly by fiscal tightening kicking in."

The euro traded at $1.3268 at 10:29 am in Frankfurt, down from $1.3308 yesterday. It has depreciated 7.7 percent against the dollar over the past year. The euro-area manufacturing gauge rose to 57.1 in December from 55.3 the previous month, while the services indicator fell to 54.2 from 55.4, Markit said. The German services gauge held at 59.2 in December, higher than the initially estimated reading of 58.3.

Estonia this year became the 17th nation to join the euro-region economy.