Eu­ro­zone busi­ness ac­tiv­ity re­bounds to 10-month high in Oc­to­ber

The Sun (Malaysia) - - SUNBIZ -

BRUS­SELS: Eu­ro­zone busi­ness ac­tiv­ity picked up strongly in Oc­to­ber to a 10-month high, re­cov­er­ing from a dip in Septem­ber, as eco­nomic pow­er­house Ger­many led the way, a closely watched sur­vey showed yes­ter­day.

Data mon­i­tor­ing com­pany IHS Markit said the Oc­to­ber fig­ures were en­cour­ag­ing, af­ter months where the econ­omy has bumped along the bot­tom and was then badly rat­tled by Bri­tain’s shock vote to quit the Euro­pean Union in June.

It said its pre­lim­i­nary Oc­to­ber Com­pos­ite Pur­chas­ing Man­agers In­dex (PMI) for the 19-na­tion eu­ro­zone jumped to 53.7 points from 52.6 in Septem­ber.

The PMI mea­sures com­pa­nies’ readi­ness to spend on their busi­ness and so gives a good idea of how the un­der­ly­ing econ­omy is per­form­ing. Any read­ing above the boom-bust 50-point line in­di­cates the econ­omy is ex­pand­ing.

By sec­tor, the PMI for ser­vices rose to 53.5 points from 52.2 in Septem­ber while man­u­fac­tur­ing hit 53.3 points af­ter 52.6.

IHS Markit said a strong per­for­mance in Ger­many helped off­set con­tin­ued soft­ness in France, the sec­ond largest eu­ro­zone econ­omy.

“The eu­ro­zone econ­omy showed re­newed signs of life at the start of the fourth quar­ter, en­joy­ing its strong­est ex­pan­sion so far this year with the prom­ise of more to come,” IHS Markit chief busi­ness economist Chris Wil­liamson said in a state­ment.

He said the fig­ures were con­sis­tent with growth of 0.4% in the last three months of 2016, with Ger­many now ex­pected to gain 0.5%. While France will be slower at an es­ti­mated 0.2-0.3%, “there are var­i­ous in­di­ca­tors which sug­gest that France will en­joy stronger growth in com­ing months”, he said.

In all, “pol­i­cy­mak­ers will be en­cour­aged by signs of both stronger eco­nomic growth and ris­ing price pres­sures,” which could see the Euro­pean Cen­tral Bank ease back on its mas­sive eco­nomic stim­u­lus pro­gramme.

The eu­ro­zone econ­omy grew 0.3% in the three months to June, down sharply from 0.6% in the first quar­ter. Third-quar­ter data is ex­pected next week and most an­a­lysts be­lieve it will be in line with the sec­ond quar­ter’s 0.3%. – AFP

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