Eurozone: Eurozone composite PMI rises to 54-month high in November
November 23, 2015
Business activity in the Eurozone jumped to the highest level in November in over four years, supported mainly by more dynamism in the services sector. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), elaborated by Markit, showed that the indicator jumped from a revised 53.9 in October (previously reported: 54.0) to 54.4 in November, also overshooting the 54.0 the markets had expected. According to Markit, November’s survey highlighted the broad-based nature of the improvement. On the index, readings above 50 indicate expansion; below they indicate contraction.
The recovery continued to be buttressed by the services sector, where activity and new business increased at the fastest pace since May 2011. In addition, the services sector continues to provide employment, which showed the biggest gain in five years. Meanwhile, manufacturing production also garnered rhythm, reaching a three-month high. The increase in manufacturing output was propelled by a notable improvement in order books. Moreover, manufacturing firms increased staff in November due to, according to Markit, “the improved demand environment.”
Regarding the two largest Eurozone economies, in November the PMI rose in Germany while it slipped in France, with the former enjoying its fastest pace of expansion in three months, while the latter experienced the slowest pace in three months. The remainder of the region saw a notable improvement in November, reflecting the second-steepest rise in output since the global financial crisis hit the region in 2009.
November’s positive result is welcoming news that the Eurozone recovery remains in place in the last quarter of the year. Markit concluded that, “the PMI shows a welcome acceleration of Eurozone growth, putting the region on course for one of its best quarterly performances over the past four-and-a-half years.”
Author: Ricardo Aceves, Senior Economist