ROME (Bloomberg) -- Europeans' confidence in the economy probably remained close to a six-year high in May and manufacturing growth accelerated as companies invested and hired workers to meet orders, surveys of economists show.

An index of sentiment among executives and consumers in the euro region probably stayed at 111 after reaching a six-year high of 111.1 in March, the median of 21 forecasts in a Bloomberg News survey showed. The European Commission will publish the report on May 31. A gauge of manufacturing expansion, to be published on June 1, may have risen to 55.5 from 55.4, another survey showed.

Growth in the 13-nation economy is set to eclipse that of the U.S. for the first time since 2001 after accelerating to the fastest pace in six years in 2006. The resilience of the European economy amid a U.S. slowdown strengthens the European Central Bank's case for raising interest rates further this year. “We have robust growth across the board in the euro region; there aren't many risks to growth in the short term,” said Michael Schubert, an economist at Commerzbank AG in Frankfurt. “The ECB is even more optimistic than we are, so there's no reason to think it will stop at 4 percent in June.”

The ECB has signaled it will raise the benchmark refinancing rate from 3.75 percent next week, the eighth increase since late 2005. The Frankfurt-based lender is concerned that stronger economic growth will fuel inflation by giving companies room to raise prices and meet workers' demands for more pay.

More jobs

Consumers are encouraged by a decline in unemployment to the lowest level since figures for the region started being collated in 1993. The German jobless rate probably fell to a 12-year low of 9.1 percent this month and in France unemployment may have declined to a 24-year low of 8.2 percent, government reports are forecast to show this week.

European retail sales increased the most in 10 months in April, the Bloomberg purchasing managers index showed last month. The gauge for May, compiled for Bloomberg LP by NTC Economics Ltd., will be published on May 30. Europe's economy expanded 0.6 percent in the first quarter from the fourth, more than economists had estimated, as corporate investment offset the effects of a higher interest rates and a German sales-tax increase. The European Commission this month raised its economic growth forecast for 2007 to 2.6 percent, compared with 2.2 percent in the U.S.

European companies are benefiting. MAN AG, Europe's third- largest truckmaker, on May 3 raised its 2007 sales and earnings forecasts after first-quarter profit beat analysts' expectations and new orders jumped.

Currency drag

Siemens, Europe's largest engineering company, said April 24 second-quarter profit rose 36 percent, beating analysts' estimates. DaimlerChrysler, the world's second-largest maker of luxury cars, said May 15 first-quarter profit more than doubled.

Slower U.S. expansion and an appreciating euro may yet become a drag on growth this year. The U.S., the world's largest economy, grew at the weakest pace in four years in the first quarter amid a housing slump. At the same time, the euro has gained almost 5 percent against the dollar since mid-January. “If people realize there are more upside risks in the euro area and more downside risks in the U.S., that could strengthen the euro even more,” said Schubert at Commerzbank. “But for now, the underlying strengths of the economy are rather high.”

Investors have already raised bets on a further rate increase by the ECB, to at least 4.25 percent later this year, futures trading shows.

The implied rate on the three-month Euribor futures contract for December was 4.49 percent, up from 4.36 percent on May 1. The contracts settle to the three-month inter-bank offered rate for the euro, which has averaged 16 basis points more than the ECB's key rate since the single currency's start in 1999.