The pace of economic growth in the eurozone rose to the highest seen so far this year in October, led by a growth upturn in Germany, according to PMI® survey data.
Faster growth of orders books and an acceleration in the pace of hiring also augur well for the economy to continue to strengthen in coming months. Inflationary pressures meanwhile showed signs of picking up, with the survey recording the largest increase in prices charged for over five years.
The Markit Eurozone PMI rose from 52.6 in September to 53.7 in October, signalling the fastest monthly increase in business activity since December of last year. New order growth was the highest since January, prompting firms to take on extra staff. Employment showed the biggest gain for three months.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “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.
October’s PMI is consistent with a quarterly GDP growth rate of 0.4%, led by a 0.5% pace of expansion in Germany. Modest growth of 0.2-0.3% is being signalled for France, but there are various indicators which suggest that France will enjoy stronger growth in coming months, including a marked build-up of uncompleted work”.
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