Eurozone business activity grows at fastest pace since early 2023

(Sharecast News) - Eurozone business activity expanded at its fastest pace in two-and-a-half years in November, driven by growth in the service sector which offset manufacturing weakness, according to a survey published on Wednesday. The HCOB eurozone composite purchasing managers' index rose to 52.8 in November from 52.5 in October - the sixth consecutive monthly rise. The services PMI climbed to 53.6 last month from 53.0 in October, reaching its highest level since May 2023 as new business volumes grew at the strongest pace in 18 months.

A reading above 50.0 indicates growth, while those below that level point to a contraction.

"The service sector in the eurozone is showing clear signs of recovery," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

"The strong performance in the service sector was even enough to more than offset the weakness in the manufacturing sector, meaning that economic output in the euro zone grew slightly faster in November than in the previous month," he added.

"The geographical breadth of the recovery supports this assessment. For the coming year, we expect positive stimulus from Germany's expansionary fiscal policy and Spain's sustained high economic growth."

"In France, the fragile political situation argues against increasing momentum. In Italy, there is still hope for effects from the EU Next Generation funds, but these are likely to be felt primarily in the construction industry and only indirectly by service providers."

Reporting by Frank Prenesti for Sharecast.com