Manufacturing in the Euro-zone continued to expand in January according to the 2000 purchasing managers surveyed by the NTC Research Ltd. for Reuters Group Plc. The rise of 0.25% in January marked the fifth successive month of increase and was at the highest level since January, 2001. Rising demand for Euro-zone products from the US and Asia has apparently offset the negative impact of the increasing Euro. Although the upward trend in manufacturing activity has been uneven in some countries, all but Greece of the Euro-zone countries, for which data are available, have been in the expansion phase since September 2003.

The rise in manufacturing activity has improved business confidence. Business confidence was at -7 in January, compared with a low in 2003 of -14 in July. In spite of the improvement in confidence, however, more business men currently view the outlook negatively than those who view it positively.