Eurozone private sector activity expanded at its fastest pace in 41 months in September, according to preliminary PMI survey data released by S&P Global.
The Flash Eurozone Composite PMI Output Index increased to 53.1 from 52.0 in August, reaching its highest level since April 2023.
The index remained above the 50.0 level separating expansion from contraction for a third consecutive month.
Services and Manufacturing Activity Increase
Growth was recorded across both services and manufacturing during September.
The Services Business Activity Index rose to 53.0 from 51.6 in August, reaching a 10-month high.
The Manufacturing Output Index increased to 53.4 from 53.3, its highest reading in 55 months, while the headline Manufacturing PMI remained unchanged at 52.7.
Germany recorded a third consecutive monthly expansion, with activity increasing at its fastest rate in almost a year.
France returned to growth for the first time in 10 months, while activity also expanded across the rest of the eurozone.
New Orders Record Largest Increase Since May 2022
New business increased for a third consecutive month, with the rate of growth reaching its highest level since May 2022.
Export orders also increased for a second consecutive month following 53 months of declines. The improvement was primarily driven by manufacturing.
Eurozone employment increased modestly for the second consecutive month. Services companies added staff, while manufacturing employment was unchanged.
Germany recorded its fastest rate of job creation since mid-2023, while employment continued to decline in France.
Price Pressures Increase
Input costs and prices charged by eurozone businesses increased at their fastest rates in four months.
The increases were recorded across both manufacturing and services and among the major eurozone economies covered by the survey.
Business confidence regarding activity over the coming 12 months declined to a three-month low.
S&P Global said weaker expectations among French businesses contributed to the decline, while sentiment in Germany was unchanged.
S&P Global Estimates 0.4% Quarterly GDP Growth
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the preliminary PMI readings were consistent with eurozone GDP increasing at a quarterly rate of 0.4%.
He added that “the resilience of economic growth amid the headwinds of geopolitical issues and rising prices will likely embolden the ECB to hike interest rates again before the end of the year.”
The interest-rate assessment represents Williamson’s interpretation of the survey data rather than a confirmed European Central Bank policy decision.
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