Eurozone Private Sector Growth At 41-Month High

(RTTNews) - The euro area private sector expanded at the fastest pace in nearly three-and-a-half years in September amid rising demand and employment, final purchasing managers' survey data from S&P Global showed Monday.

The composite output index posted 53.1 in September, in line with flash estimate, and above August's 52.0.

Both the manufacturing and service industries expanded at faster rates in September. The services Purchasing Managers' Index rose to 53.0, as initially estimated, from 51.6 in August.

"The collective signal from the PMI surveys is one of GDP growing at a 0.4% quarterly rate, with momentum accelerating as we head into the fourth quarter," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

Williamson said a renewed upturn in price pressures hint at eurozone inflation running closer to 4 percent. "Combined with the acceleration of growth indicated by the PMI, the data will spur further speculation of more aggressive monetary policy tightening," he added.

Composite demand improved at the fastest pace in 41 months and orders from foreign clients rose at the sharpest rate in over four-and-a-half years. For the first time since June 2022, backlogs increased at eurozone companies.

There was a marginal expansion in workforce numbers in September. However, business optimism remained subdued by historical standards.

Finally, price pressures intensified in September. Input cost and output charge inflation rates accelerated sharply.

Among member states, Spain remained the fastest-growing economy in September. Germany's upturn accelerated further and was among the strongest seen since early-2022. Meanwhile, modest growth rates were seen for Italy and France.

Germany's business activity grew the most in almost a year. The final composite output index climbed to 53.8 in September, as estimated, from 51.8 in August. The services PMI posted 52.9 in September, in line with flash estimate, and down from 49.7 in the prior month.

France's composite activity expanded at the fastest pace in more than two years in September. The final composite output index hit 51.1, up from 48.5 in August. The flash score was 51.2. The services PMI rose to 51.2 from 48.0 in the prior month. The score was below the flash estimate of 51.4.

Spain's private sector expanded for a fifth consecutive month in September. The composite index advanced to 56.8 from 55.8 in August. The rate of growth was the fastest since December 2024. The services PMI registered 58.3, up from 57.8 in the previous month.

Meanwhile, Italy's private sector grew at the slowest pace in three months. The composite PMI dropped to 51.0 from 53.6 in August. The services PMI posted 51.7 in September, down from August's 40-month high of 55.2.