Japan’s earthquake has had scant economic impact so far on the eurozone, which saw robust growth, rapid job creation – and mounting inflation pressures this month, according to a closely watched survey.

Purchasing managers’ indices for the 17-country region showed the pace of expansion in private-sector activity dipped only slightly compared with February, when growth was the strongest for more than four years. Prices charged by businesses grew at the fastest pace in almost three years.

Japan’s earthquake, which occurred just as data for the survey started to be collected, “had added to uncertainty but at the moment it has not had any discernible impact,” said Chris Williamson, chief economist at Markit, which produces the indices. Companies were more concerned about events in the eurozone and fiscal austerity measures, Mr Williamson said. However, disruption to supply chains could still hit activity levels in coming weeks and months.

The latest data survey added to evidence of a strong eurozone growth rebound in the first quarter of this year and will strengthen the European Central Bank’s determination to press ahead in April with a planned interest rate increase. ECB policymakers see a “normalisation” of monetary policy as long overdue and have stepped up warnings recently of the dangers of leaving borrowing costs too low for too long. The ECB has left its main interest rate unchanged at 1 per cent since May 2009.

“One doesn’t have to be a rocket scientist to understand that this report makes an ECB rate hike in April a near certainty,” said Peter Vanden Houte, European economist at ING in Brussels.

Eurozone growth slowed late last year, largely as a result of bitter winter weather. But the purchasing managers’ indices indicated private sector output in the first three months of 2011 expanded at the fastest pace since the third quarter of 2006.

Growth continued to be led by manufacturing, although activity in the sector slowed in March, but service industry activity picked up in March to show the fastest growth since August 2007.

The indices again showed Germany and France pulling ahead of the rest of the eurozone. The average rate of output expansion in the eurozone’s two largest member states was the fastest in almost five years but was modest elsewhere and weaker than in February. Similarly, employment in France and Germany grew in March at the fastest pace since July 2007. But the rest of the eurozone reported further job losses.

Prices charged by businesses for goods and services rose for the eight consecutive month in March with the rate of inflation unchanged from February, when it was the highest since July 2008. Prices charged by manufacturers saw by far the steepest increases.

Financial Times