Business activity in the eurozone grew faster than expected this September with new business activity in Germany and France boosting activity to a 27-month high, according to the Markit Eurozone PMI Composite Output Index.
Markit’s flash PMI (Purchasing Managers’ Index) rose for the sixth consecutive month, up from 51.5 in August to 52.1. A reading above 50 indicates business expansion.
Business activity in the eurozone has now risen for three successive months, and September rounded off the strongest quarterly expansion since the second quarter of 2011. The increases activity was across services and manufacturing, although only services saw growth accelerate in September.
Germany saw business activity grow at the fastest rate for eight months as new business showed the largest monthly rise for over two years. Employment grew at the sharpest rate for 18 months as a result. While German service providers reported the biggest jump in activity for seven months, manufacturers reported the weakest increase in output since June.
Business activity in France rose marginally for the first time since February 2012. This reflected a stabilisation of new order inflows. Employment showed the smallest monthly drop in the current 19-month sequence as a result. Business activity returned to growth in the service sector, but manufacturers reported a faster decline in output.
Elsewhere across the eurozone, business activity rose on average for the second successive month, growing at the steepest rate since April 2011.
Commenting on the flash PMI data, Chris Williamson the Chief Economist at Markit said:
“An upturn in the Eurozone PMI in September rounds off the best quarter for over two years, and adds to growing signs that the region is recovering from the longest recession in its history.
“The overall rate of growth signalled by the Eurozone PMI remains modest, however, consistent with gross domestic product rising by a meagre 0.2 percent in the third quarter. While rising inflows of new business bode well for a further upturn in the fourth quarter, policymakers at the ECB will no doubt view it as too early to change their stance on keeping policy on hold for an extended period.”
The Eurozone PMI® (Purchasing Managers’ Index®) is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 companies based in the euro area manufacturing and service sectors. National manufacturing data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland. The flash estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. Read more about Markit’s PMI here.