Sept 02 - Strong orders for manufactured goods helped euro zone factory activitiy rise at its fastest pace in over two years in August. As Sonia Legg reports there was even a backlog of work for the first time since mid-2011.
There have been signs of recovery before but now there's evidence the euro zone's revival could be much broader based. Manufacturing growth in August was at levels not seen since June 2011. Factory output was also its highest since May of that year and new orders arrived at their fastest pace. Survey conductor Markit even found some manufacturers were enjoying their first backlog of work. Rob Dobson is a Senior Economist at Markit. (SOUNDBITE) (English): ROB DOBSON, SENIOR ECONOMIST, MARKIT, SAYING: "We have seen that since the global financial crisis, the odd patch where we have seen a little bit of recovery and then it fades back, but those recoveries have been in one nation. What we are seeing here is on a broader spectrum. On the main drag and in the periphery there are signs that things are stabilising so, yes, hopeful." Markit's manufacturing index jumped to 51.4 - 50 signifies growth. France was the only euro zone country not to see an improvement and those outside the euro zone - the UK in particular - are benefitting. It's manufacturing index topped 57 - up almost 2 and a half points. (SOUNDBITE) (English): ROB DOBSON, SENIOR ECONOMIST, MARKIT, SAYING: "A lot of this growth is following on from a raft of positive indicators - manufacturing, services, construction, retail, the housing market. The UK seems to be going through a little bit of a mini boom and in many ways that's down to the stabilisation in its main trading partner, the euro zone." The news - coming after a rise in factory activity in China - had a positive impact on global markets. But the word fragile was still being applied to the rebound. And many countries - especially Asian ones which have benefitted the most - are still bracing for the start of the US Federal Reserve's stimulus wind down.