Eurozone business activity speeds up in November

Eurozone business activity speeds up in November

Troy Powers
November 24, 2016

Eurozone composite PMI, which measures overall activity, rose to 54.1 from 53.3 in October, according to data company IHS Markit. This is the best reading all year and makes it an 11-month high.

The flash services PMI came in at 54.1 from 52.8 in October, also an 11-month high and surpassing estimates of 52.9.

Meanwhile, the flash manufacturing PMI fell to 51.5, in line with expectations, from 51.8 in October.

The survey showed growth was led by Germany, as services companies reported the fastest expansion since May.

(Adds comments, details) * November flash euro zone composite PMI 54.1 * European Central Bank still likely to ease policy however-economists * Manufacturers lead strong performance * PMIs point to fourth-quarter growth of 0.4 pct-Markit By Sumanta Dey Nov 23 (Reuters) - Euro zone business activity expanded the most in almost a year in November on strong manufacturing and buoyant services growth in Germany, stirring some optimism that economic momentum is picking up again. Export sales were reported to have increased only marginally on the month with competitive pressures and the strong dollar having an adverse impact on export orders, which rose only marginally for the month.

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"What's especially encouraging to see is the buildup of uncompleted orders, which showed the largest rise since May 2011".

"It looks like smaller economies are picking up pace after a very long time and downward price pressures are somewhat abating with companies managing to push through price increases", said Peter Vanden Houte, chief euro zone economist at ING Financial Markets. Employment growth strengthened for the second month running to reach the joint-highest pace since February 2008.

"US manufacturers enjoyed a strong post-election bounce in November, further tilting the scales toward the Fed hiking rates in December".

"We're seeing broad-based growth in the euro zone, not just in the large economies, with strong upticks in manufacturing supported by accelerating output and new orders", he added.

In the composite PMI survey, a sub-index measuring new business shot up to 53.8 from 52.9, its highest since December 2015.