Eurozone purchasing managers’ indices bounced back in October, reassuring investors worried about a sharp deceleration in growth while highlighting a divergence between the region’s two largest economies.
Markit’s composite PMI rose to a 10-month high of 53.7 from 52.6, well above consensus expectations for a reading of 52.8, as the data company’s PMIs for the eurozone’s services and manufacturing sectors also rose more than expected.
The release followed strong PMIs from Germany earlier on Monday and mixed data from France . where the composite PMI declined as the services gauge slipped. The figures overall marked an improvement from the September data, when Germany had been hit by services sector weakness and a French manufacturing downturn continued. By contrast, in October the French PMI for the manufacturing sector recovered to a 10-month high of 51.3 from 49.7, above the neutral 50 reading analysts had predicted, while the German services index jumped well above expectations to 54.1 from 50.9.
In its report on Monday, Markit said Germany led the eurozone in October growth.
“The eurozone economy showed renewed signs of life at the start of the fourth quarter, enjoying its strongest expansion so far this year with the promise of more to come. With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further as we head towards the end of the year,” said IHS Markit chief business economist Chris Williamson.
via The Street