Eurozone periphery diverges ever more in growth indicator

Eurozone business activity in debt-pressured peripheral states again lagged markedly in January, according to analysis of a closely-watched survey into manufacturing and services trends yesterday.

Growth accelerated in both manufacturing and services, echoing all but one of the 18-month recovery period, London-based Markit researchers said of their purchasing managers’ index (PMI), a survey of 4,500 euro area companies.

The index hit 56.3 points in January, up from 55.5 in December – any score above 50 suggests economic expansion.Manufacturing activity, though, dipped, and “the divergence between Germany and the rest of the single currency area has reached a new high,” according to Markit chief economist Chris Williamson.

Outside of France and Germany, “the periphery has now seen new orders fall in four of the past five months,” he said, with employment also falling outside of the two biggest economies, “especially in the service sector, which is feeling the pinch from austerity-hit domestic demand more than manufacturing.”