Eurozone Private Sector Growth Strongest Since Early 2023

(RTTNews) - The euro area private sector expanded at the fastest pace since April 2023 amid solid expansions in both the services and manufacturing sectors, survey data from S&P Global revealed Wednesday.

The flash composite output index advanced to 53.1 in September from 52.0 in the prior month. The score was seen at 51.7.

The reading suggested a third straight monthly growth in activity and one that was the fastest in nearly three-and-a-half years. Both the manufacturing and services sectors reported faster growth in September.

The flash services Purchasing Managers' Index rose unexpectedly to 53.0, a 10-month high, from 51.6. The reading was forecast to fall to 51.4. At the same time, the factory PMI remained unchanged at 52.7 compared to forecast of 52.6.

Accelerating business growth means the flash PMI survey is indicative of GDP rising at a quarterly rate of 0.4 percent, S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

With order book growth picking up further momentum across manufacturing and services in September, sustained momentum is expected heading into the fourth quarter, Williamson noted.

He added that the resilience of economic growth amid headwinds and rising prices raise the chances of rate hike sooner rather than later to put an October hike very much on the table.

Despite surging oil prices, low water levels and supply chain disruptions, economic activity remains relatively unharmed, ING economist Carsten Brzeski said.

New orders grew the most since May 2022, underpinned by a further rise in export business. Sustained increases in new orders resulted in an accumulation of backlogs of work.

Meanwhile, the rate of job creation remained muted as confidence in the year-ahead outlook eased to a three-month low.

Regarding prices, the survey showed that inflationary pressures intensified in September. Both input and output prices rose at the sharpest rates in four months.

The survey showed that the latest increase in output was broad based across the different geographies covered by the data.

France's private sector activity returned to growth in September and marked the fastest expansion in over two years. The headline composite output index posted 51.2 in September, up from 48.5 in August.

The services PMI hit a 10-month high of 51.4 compared to 48.0 in August. The score was expected to rise moderately to 48.3. Meanwhile, the factory PMI dropped more-than-expected to 50.3 from 51.1. The expected reading was 50.9.

Germany's private sector expanded at the fastest pace in 11 months in September, reflecting a renewed increase in activity across the service sector. The composite output index climbed to 53.8 from 51.8 in August.

At 52.9, the services PMI reached a 7-month high from 49.7 in the previous month. The score was forecast to rise to 49.9. The factory PMI dropped to 53.8 from 54.3 and also remained below forecast of 54.1.