Eurozone Private Sector Growth At 4-Month High
September 22 2017 - 4:25AM
RTTF2
Eurozone's private sector expanded at the fastest pace in four
months in September signaling that the economy ended the third
quarter on a strong note.
The headline composite output index rose unexpectedly to 56.7 in
September from 55.7 in August, flash data from IHS Markit showed
Friday. The expected score was 55.6.
Growth accelerated in both manufacturing and services, albeit
with the former continuing to lead the expansion. The service
sector activity showed the biggest growth since May, while the
expansion in manufacturing output was the greatest since April
2011.
The services Purchasing Managers' Index increased to 55.6 from
54.7 in August. The score was forecast to rise slightly to
54.8.
At the same time, the factory PMI climbed to 58.2 from 57.4 a
month ago, while it was forecast to fall to 57.2.
"The survey data point to 0.7 percent GDP growth for the third
quarter, with accelerating momentum boding well for a buoyant end
to the year," Chris Williamson, chief business economist at IHS
Markit, said.
"The rise in business activity and accompanying build-up of
price pressures will fuel expectations that the ECB is poised to
announce its intention to rein back some of its stimulus, reducing
its asset purchases in 2018," Williamson said.
While PMI data will embolden policymakers, as inflation is set
to rise only gradually markets are overestimating how soon the
European Central Bank will raise interest rates, Stephen Brown, an
economist at Capital Economics, said.
Data showed that rates of expansion in France and Germany
accelerated to the highest seen for over six years in
September.
Germany's composite output index rose unexpectedly for the
consecutive second month in September, to 57.8, from 55.8 in
August. This was the highest reading since April 2011. The
consensus score was 55.7.
The manufacturing PMI climbed to 60.6 in September from 59.3 in
August. The expected reading was 59. The sector logged the sharpest
monthly improvement in business conditions since April 2011.
Similarly, the services PMI improved to a 6-month high of 55.6
from 53.5 in August. The score was above the expected level of
53.7.
France's composite PMI rose unexpectedly to a 76-month high of
57.2 in September. Economists had forecast the index to drop to
55.0 from 55.2 in August.
Manufacturing production rose to the greatest extent since April
2011. The factory PMI climbed to 56.0 from 55.8 in the previous
month. The reading was forecast to drop to 55.5.
The rate of growth in service sector activity accelerated in
September and was only marginally weaker than May's near-six-year
peak. The corresponding PMI improved to 57.1 from 54.9 a month ago.
The expected level was 54.8.
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