The euro zone saw the fastest business growth this year, with the Composite Purchasing Managing Index (PMI) for November coming in at 54.1, the highest since December 2015 and up from 53.3 in October, according to data provider Markit.
Both the manufacturing and service sectors increased at similar rates, with the latter reaching an 11-month high.
“The preliminary PMI results for November indicate the sharpest monthly increase in business activity so far this year, with plenty of signs that growth will continue to accelerate,” Chris Williamson, chief business economist at IHS Markit, said in a statement.
Wednesday’s readings point to a 0.4 percent gross domestic product (GDP) growth in the member bloc for the fourth quarter of this year, according to Markit.
“What’s especially encouraging to see is the build-up of uncompleted orders, which showed the largest rise since May 2011,” Williamson added.
France surprises, but Germany continues to lead
Earlier, French PMIs showed that the country’s private sector was returning to growth. The flash composite figure increased to 52.3 in November from 51.6 in October.
“An upbeat rise in the services index was the key driver of the increase in the composite PMI, offsetting a marginal decline in the manufacturing gauge,” Claus Vistesen, chief euro zone economist at Pantheon Macro said in an email.
However, in Germany, the PMI data was less optimistic. The index dropped slightly to 54.9 in November from 55.1 in October.
“Almost no change compared with the headline last month, Vistesen said. “In contrast to France, companies in Germany are operating with stable margins as higher input costs are being passed on to end-consumers,” he added.
With euro zone businesses registering improved book volumes, they have taken on more employees. This has pushed employment figures to a fourth-month high in November.
“Average prices charged for good and services showed the biggest rise for over five years, albeit with the rate of increase being very modest. However, with indicators such as rising backlogs of work and longer supplier delivery times suggesting demand is exceeding supply, price pressures look set to intensify further in coming months,” Williamson said in a statement.
The increasing inflationary pressures should ease concerns among officials at the European Central Bank (ECB), who have struggled to bring inflation near to its 2 percent target.
[Source:-CNBC]
