Eurozone PMI Hits 41-Month High on Strong Service Sector Growth
The eurozone's service sector saw stronger growth in September, reaching its highest level in 41 months. The final services Purchasing Managers' Index (PMI) rose to 53.0, up from 51.6 in August, matching earlier estimates. This marks the fastest expansion since November 2020, with business activity across the region hitting a three-and-a-half-year high.
The composite PMI, which combines manufacturing and services, increased to 53.1 from 52.0. Demand improved, employment rose, but inflationary pressures intensified, with input costs and prices charged climbing at their quickest pace since May. The survey highlighted broad-based strength, with both manufacturing and service industries expanding at faster rates.
Spain remained the fastest-growing economy in the region, while Germany's growth accelerated to near its highest levels since early 2022. Italy and France saw more modest growth. Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that eurozone GDP is growing at a 0.4% quarterly rate, driven by IT-related services, AI investments, and consumer-oriented services, particularly in Spain.
However, Williamson cautioned that rising price pressures suggest eurozone inflation may hover around 4%, above the European Central Bank's 2% target. The data could fuel speculation about more aggressive monetary policy tightening.