Ankara:Private sector activity in the Eurozone surged in September, achieving its most rapid expansion in almost three-and-a-half years. This growth was reflected in the composite Purchasing Managers' Index (PMI), which rose to a 41-month peak, as reported by SandP Global on Monday.
According to Anadolu Agency, the final composite PMI output index increased to 53.1 from 52.0 in August, with the services business activity index reaching a 10-month high of 53.0, up from 51.6. A PMI reading above 50 indicates expansion in business activity.
Both the manufacturing and services sectors experienced accelerated output growth, marking a strong conclusion to the third quarter, driven by improved demand and higher employment levels. All five countries included in the composite survey reported growth for the first time since November, with Spain leading, followed by Ireland and an accelerated upturn in Germany. Italy and France also showed modest growth.
New orders rose at the fastest rate in 41 months, bolstered by the most significant increase in foreign client orders in over four and a half years. The rise in outstanding work, the first since June 2022, led companies to hire more staff, although the increase in employment was marginal.
Chris Williamson, chief business economist at SandP Global Market Intelligence, stated that the PMI surveys indicate GDP growth at a 0.4% quarterly rate, with momentum increasing as the fourth quarter approaches. He highlighted robust growth in IT-related services, driven by investments in artificial intelligence, while consumer-oriented services remained strong despite rising energy prices.
However, inflationary pressures have intensified, with input costs and selling prices climbing at their fastest rates since May. Service providers also increased their charges at the highest rate since February 2024. Williamson noted that the renewed price pressures suggest Eurozone inflation might be closer to 4%, exceeding the European Central Bank's 2% target. These developments could lead to speculation about more aggressive monetary policy tightening.