(Reuters) - The euro zone started 2017 by maintaining its recent solid growth as a weaker currency boosted orders for the bloc's manufactured goods while rising prices failed to dent demand in its services industry, a survey found.
Those signs of ongoing inflationary pressures will be welcomed by policymakers at the European Central Bank who for years have been unable to get prices to rise anywhere near as fast as they would like.
IHS Markit's Euro Zone Flash Composite Purchasing Managers' Index, seen as a good overall growth indicator, only dipped slightly from December's five-year high of 54.4 to 54.3, comfortably above the 50-point line that indicates growth.
A Reuters poll had predicted a modest uptick to 54.5. "Some indices are showing some particularly encouraging signs. The employment index was at its highest since February 2008 so a clear indication firms are expanding at a rate we have not seen since the global financial crisis," said Chris Williamson, chief business economist at IHS Markit.
Williamson said the PMI, if maintained, pointed to first quarter economic growth of 0.4 percent, in line with a Reuters poll published earlier this month.
A sub index measuring prices charged spent its third month above the break-even mark although it ticked down to 51.6 from December's 51.7, which was the highest since July 2011.
Prices in the 19-member bloc rose 1.1 percent in December on a year earlier. The ECB wants inflation below, but close to 2 percent and has bought more than a trillion euros worth of euro zone government bonds, putting cash into the banking system with the aim of stimulating price rises in the economy.
Despite those rising prices, activity in the bloc's manufacturing industry increased at the fastest pace since April 2011. Its PMI was 55.1, up from 54.9 and above the median forecast of 54.8 in a Reuters poll of 48 economists.
An index measuring output, which feeds into the composite PMI, nudged down to 55.9 from December's 32-month high of 56.1. New export orders, which includes trade amongst member countries, held steady at last month's 54.8, the highest reading since the start of 2014.
"Firms are benefiting from the exchange rate but we are also seeing demand lift higher in a number of countries, the United States in particular but also Asian countries as well," Williamson said.
The PMI for the bloc's dominant service industry slipped to 53.6 from 53.7, confounding the prediction for a rise to 53.9. But suggesting growth will be maintained, demand increased.
The new business index rose to 53.6 from 53.5, its highest in a year.
(Editing by Toby Chopra)
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