Eurozone private sector expanded the most so far this year in November, reflecting stronger improvement in services, despite heightened political uncertainty following the U.S. presidential election.
The composite output index rose unexpectedly to an 11-month high of 54.1 from 53.3 in October, flash survey data from the Purchasing Managers' Survey by IHS Markit showed Wednesday.
The score was expected to fall slightly to 53.2. The latest reading signaled the strongest monthly increase in output since last December.
Identical rates of expansion were seen across both the manufacturing and service sectors. Although the manufacturing output growth slowed, the increase was still the second-largest this year so far.
The services Purchasing Managers' Index climbed to 54.1 from 52.8 in October and also above the expected level of 52.9.
The factory PMI rose marginally to 53.7 from 53.5 in October. Nonetheless, the score was expected to fall to 53.3.
Data showed that rising order books prompted firms to take on extra staff at the joint fastest rate since early-2008, and prices charged inched higher, indicating that inflationary pressures are at their highest for over five years.
The survey suggests that the improvement in the Eurozone as a whole should be sustained in the near term, with the backlogs of work and new orders indices also rising further in November to their highest levels this year, Jennifer McKeown at Capital Economics said.
However, the economist suspects that growth will slow next year as political uncertainty and a temporary rise in inflation weigh on domestic demand.
"The PMI readings so far for the fourth quarter point to GDP expanding 0.4 percent, led by a rebound in German growth to 0.5 percent," Chris Williamson, chief business economist at IHS Markit, said.
"France is also seen to be enjoying its best spell since the start of the year, with the PMIs signaling GDP growth of 0.2-0.3 percent in the fourth quarter," Williamson added.
In Germany, the rate of business activity growth slid slightly, but remained well above the recent low seen in September. The composite output index dropped to 54.9 in November from a 10-month high of 55.1 in October.
Overall expansion in output was attributed by panelists to improved order intakes and increased capacity. While service providers recorded an acceleration in activity growth, manufacturers noted a slight slowdown.
The services PMI climbed to a 6-month high of 55.0 in November from 54.2 in the previous month. In contrast, it was forecast to drop to 54.0.
On the other hand, the factory PMI fell to 54.4 in November from 55.0 a month ago. Economists had expected the index to decrease to 54.8.
Meanwhile, growth picked up in France to show the second-best expansion over the past year. The flash composite output index rose to 52.3 in November from 51.6 in October.
The services PMI climbed more-than-expected to 52.6 in November from 51.4 in October. The expected score was 51.9.
However, the flash manufacturing PMI fell to 51.5, in line with expectations, from 51.8 in October. Manufacturing output rose for the third consecutive month, although the rate of growth eased from October and was marginal.
by RTT Staff Writer
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