PARIS â Europeâs economy is showing unmistakable signs of perking up, a private sector report showed on Tuesday, providing evidence that the European Central Bankâs bond-buying program and a weaker euro are helping to stimulate growth.
Markit Economics, a data analysis firm based in London, said its March survey of purchasing managers across the 19-nation eurozone showed output expanding at the quickest pace since May 2011, with its composite index of business activity rising to 54.1 from 53.3 in February. An index reading greater than 50 suggests economic expansion, while a number below that level suggests contraction.
âThe improvement provides welcome news to a region awaiting signs that the E.C.B.âs quantitative easing is stimulating the real economy,â Chris Williamson, Markitâs chief economist, said in a statement, referring to the central bankâs 60 billion euro, or about $ 65 billion, a month bond-buying program.
In addition to relatively strong German growth, Mr. Williamson cited âsigns of a long-awaited recovery in France,â which he said appeared to be expanding at the fastest rate since 2011.
The euro, which has been getting back some of the ground it lost since late last year, ticked up 0.3 percent, to $ 1.0977, after the report. The Euro Stoxx 50 index of eurozone blue chip shares gained 0.5 percent in late-morning trading.
On Monday, the European Central Bank president, Mario Draghi, told European lawmakers in Brussels that âthe basis for the economic recovery in the euro area has clearly strengthened.â
Mr. Draghi cited the fall in oil prices, a pickup in external demand, a weaker euro and the central bankâs âaccommodative monetary policy,â which has driven down borrowing costs, as the main reasons for optimism. The central bank expects the eurozoneâs gross domestic product to grow by 1.5 percent this year, accelerating to 1.9 percent next year and 2.1 percent in 2017.
The purchasing managersâ data provides one of the most closely watched real-time guides to the eurozoneâs economic health.
âItâs further evidence of a cyclical upturn in the eurozone,â said Janet Henry, chief European economist at HSBC in London, pointing to a number of positive signs, including an acceleration in retail spending since before the 2008 financial crisis.
The current momentum is notable mainly for the fact that it appears to be led by consumers, she said, spurred on by lower oil prices.
âThe levels arenât spectacular,â Ms. Henry said, noting that current growth would not be enough either to keep deflationary pressures at bay or to push down the jobless rate in the bloc from the 11.2 percent at which it stood in January. To ramp up growth, she added, Europe needs more investment and external demand.
The European Central Bank began its new bond-buying program this month partly out of concern that inflation was too low in the eurozone. Even without tipping into the condition known as outright deflation, in which the general level of prices is declining, a too-low inflation rate may weigh on growth and stress borrowers and their lenders. The central bank seeks to keep prices rising at a rate just below 2 percent, but prices have been declining for three straight months, most recently by 0.3 percent in February from a year earlier.
The problem of declining consumer prices is being felt not just in the eurozone, but in the United States and around the world. On Tuesday, the British Office for National Statistics reported that its consumer price index showed zero inflation in February, the lowest level on record for that measure.