The Eurozone economy has recorded its fastest growth since May 2023, fueled by a strong rebound in the services sector. According to the latest composite Purchasing Managers’ Index (PMI) data, the Eurozone’s economic activity is expanding at a robust pace.
The PMI rose to 52.5 in October, up from 51.2 in September, marking the tenth consecutive month of expansion and reaching a 29-month high. This indicates a significant acceleration in economic activity across the Eurozone.
“Finally, there are positive signals for the European economy,” said a leading economist. “The services sector has experienced a strong recovery, driven by an increase in new business not seen since May of last year.”
The expansion is largely attributed to a surge in demand and strong performance in the services sector. New business volumes have increased at the fastest rate in two and a half years, supported almost entirely by the services sector, while manufacturing orders have remained stagnant.
The composite new orders index rose to 52.1, while the services activity index jumped to 53.0, its highest level in 17 months. Spain led the growth with a reading of 56, followed by Germany at 53.9. Italy and Ireland also recorded notable expansion, at 53.1 and 53.7 respectively.
However, France remains a drag on the Eurozone’s overall performance. France was the only major economy in the region to continue contracting, with a reading of 47.7, an eight-month low.
“France is slowing the pace of growth in the Eurozone, while the rest of the economies are showing the strongest performance in two and a half years,” the economist added.
Employment Growth Accelerates
Overall employment in the Eurozone recorded its highest growth in 16 months, particularly in the services sector, which increased its hiring rate in response to growing demand. Meanwhile, manufacturing companies continued to reduce their workforce.
Input cost inflation slowed to a three-month low, while companies raised their selling prices at the strongest rate in seven months.
The European Central Bank (ECB) has kept interest rates stable, affirming that monetary policy is “in a comfortable position.”
France Faces Continued Contraction
The French economy showed a further decline in October, with the services sector contracting for the fourteenth consecutive month, affected by weak demand and political uncertainty.
