Eurozone Growth Surges
Euro zone business activity expanded at its fastest pace in nearly three and a half years in September, despite growing inflation concerns linked to higher energy prices.
The S&P Global Eurozone Services PMI rose to 53.0 in September from 51.6 in August. The composite index, which combines services and manufacturing, increased to 53.1 from 52.0.
The composite reading was the highest since April 2023 and marked the strongest quarterly performance for the bloc since the second quarter of 2022.
New Orders Accelerate
The survey showed a stronger increase in new business, with overall new orders growing at their fastest pace in 41 months.
Foreign demand also improved, with export orders ending a 39-month period of contraction.
Spain recorded the strongest performance among the countries surveyed, followed by Ireland, while Germany’s recovery accelerated.
Inflation Pressure Returns
The stronger business activity came alongside renewed price pressures.
Euro zone inflation increased to 3.8% from 3.2% in August, driven by higher energy costs. Input and output prices also rose at their fastest pace in four months.
The combination of stronger activity and renewed inflation pressure increased expectations that the European Central Bank could raise interest rates further.
