Business activity in the eurozone grows at fastest pace in 16 months

Business activity in the eurozone recorded its fastest rise in 16 months in September.

At the same time, however, new orders stagnated, raising concerns about the sustainability of growth.
S&P Global's Purchasing Managers' Index (PMI) rose from 51.0 in August to 51.2, confirming growth for the ninth consecutive month.

Values above 50 signal economic growth.

The expansion was driven primarily by the service sector, with a PMI of 51.4—the highest value in nine months.

Industry, on the other hand, is losing momentum: the manufacturing PMI fell to 49.5, putting it in contraction territory.

There are significant differences between the largest economies in the eurozone: Germany is recording strong growth, while France is reporting a decline in activity for the 13th month in a row – the fastest since April.

Employment stagnated in September after six months of growth as companies responded to stagnating new orders.

Inflation eased slightly: input costs in the manufacturing sector fell for the first time in three months, and sales prices rose at their slowest pace since May.

This development is likely to encourage the European Central Bank to leave interest rates unchanged.

(reuters, sie)