Eurozone services growth hits 41-month high as inflation concerns rise
The eurozone's service sector saw stronger growth in September, reaching its highest level in over three years. The final services purchasing managers' index (PMI) from S&P Global rose to 53.0, up from 51.6 in August, marking the fastest expansion since November 2025. This surge pushed the overall private sector activity to a 41-month high, with the composite PMI climbing to 53.1 from 52.0.
Demand improved, and employment levels increased, but inflationary pressures intensified. Both input costs and prices charged rose at their quickest pace since May. The growth was broad-based, with both manufacturing and service industries expanding at faster rates by the end of the third quarter.
Spain remained the fastest-growing economy in the region, while Germany's growth accelerated to levels not seen since early 2022. Italy and France, however, showed more modest growth. S&P Global's chief business economist, Chris Williamson, noted that IT-related services, driven by AI investments, and consumer-oriented services were particularly strong.
Williamson also warned that the renewed upturn in price pressures hints at eurozone inflation running closer to 4% than the European Central Bank's 2% target. This data could fuel speculation about more aggressive monetary policy tightening.