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LONDON, (Reuters) - Euro zone businesses enjoyed their best quarter in six years at the start of 2017 as soaring demand allowed them to raise prices at the fastest rate since mid-2011, a survey suggested on Wednesday.
Although growth was not as fast as earlier predicted, the upturn was broad-based, and survey compiler IHS Markit said the data pointed to first-quarter economic growth of 0.6 percent. A Reuters poll last month predicted 0.5 percent [ECILT/EU].
"The expansion recorded by the final PMI numbers was not quite the growth spurt indicated by the flash release, but still points to an impressive rate of economic growth," said Chris Williamson, chief business economist at IHS Markit. "This is a broad-based upturn among the euro zone's largest members. The latest numbers round off the strongest quarter since the spring of 2011."
The final Markit Composite Purchasing Managers' Index, regarded as a good guide to growth, rose to a near-six year high of 56.4 in March from February's 56.0. An earlier flash reading had suggested a sharper rise to 56.7.
The output price sub-index jumped to a near six-year high of 53.1 from 52.2. That was lower than the flash 53.3 reading but will still be welcomed by the European Central Bank, which has been trying to stimulate inflation for years.
Inflation in the 19-member currency union plunged to 1.5 percent in March, official data showed on Friday, apparently vindicating ECB President Mario Draghi's cautious policy stance and proving the bloc may be years away from a sustained rise in consumer prices. The Bank would like inflation just below 2 percent.
A PMI covering the bloc's dominant services industry came in below a flash estimate of 56.5, registering 56.0. Still, that was above the 55.5 February final number and was the highest since May 2011.
To meet growing demand - which accelerated at the fastest rate in almost six years in March - service firms ramped up hiring. The employment index was 54.4, up from 53.6 and marking the fastest rate since the end of 2007.
"Most welcome for a region still suffering near-double digit unemployment is a rise in the survey's employment index," Williamson said.
Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.
For a graphic on Euro zone snapshot, click - tmsnrt.rs/2bkCt7Q
Editing by Larry King