The latest Eurozone purchasing managers’ survey indicates that economic growth is currently stronger in the periphery than the core. This had been signalled by relative monetary trends in late 2014 but real money growth in the core has since caught up with the periphery, suggesting similarly solid prospects for the two groups.

The Eurozone PMI composite output index edged down in April but remains consistent with respectable economic expansion. The forward-looking new business index was little changed from its March level, a 46-month high, while the employment index reached its strongest level since August 2011.

More interesting than the headline readings was news that the output index for the “rest of the Eurozone” rose further, reaching its highest level since August 2007 and exceeding the level in Germany as well as France – see first chart. The employment index showed similar relative strength.

This outperformance had been predicted by faster real money growth in the periphery than the core in late 2014 – second chart. The gap has since closed, however, with core growth marginally higher in February.

French real money growth has risen particularly strongly and is now second to Spain in the big four ranking – third chart. The French PMI survey has lagged improvements elsewhere but may now catch up. The INSEE industrial survey for April, also released today, was more encouraging than its PMI counterpart: the turning-point indicator derived from the survey rose further and indicates a “favourable short-term economic situation”, according to the commentary – fourth chart.