BRUSSELS: Eurozone business activity continued to pick up in September, hitting a 27-month high, with an improved performance from Europe’s battered south feeding hopes of a continued recovery.
A closely-watched survey, the Composite Purchasing Manager’s Index (PMI) compiled by Market Economics, yesterday showed recovery gathering pace in the eurozone after the longest recession in its history.
The PMI increased to 52.2 points in September after 51.5 in August, according to a second estimate. A first had shown the index at 52.1 points.
The index, considered a reliable leading indicator of the economic climate, has improved in each month since March, remaining above the 50-mark that signals expansion throughout the third quarter. “The final PMI confirms ... that the eurozone enjoyed its strongest quarter of expansion for just over two years in the third quarter,” said Markit economist Chris Williamson.
Though growth continues to be led by Germany, business activity picked up in France, both Ireland and Italy showed signs of returning to robust growth, and even Spain stabilised.
In Italy, the eurozone’s third economy, the service sector has returned to growth after more than two years, the survey showed just a day after Prime Minister Enrico Letta defeated a challenge by Silvio Berlusconi.
Markit said the survey “marked the first increase in the level of business activity in Italy’s services sector since May 2011,” and that “the pace of growth was solid.”
Markit economist Phil Smith commented: “The data, alongside those for manufacturing, show Italian GDP (gross domestic product) at least stabilising in the third quarter and perhaps even rising slightly for the first time in more than two years.
In France, the eurozone’s second economy, business activity switched into expansion at 50.5 in September, striking a 20-month high.