Euro­zone busi­ness ac­tiv­ity grows at fastest pace this year

Malta Independent - - WORLD -

Busi­ness ac­tiv­ity across the 19 euro­zone economies grew in Oc­to­ber at its fastest pace so far this year, shrug­ging off any ma­jor con­cerns about Bri­tain’s “Brexit” vote, a sur­vey showed Mon­day.

The pur­chas­ing man­agers’ in­dex, a sur­vey of ac­tiv­ity among 5,000 com­pa­nies in the ser­vices and man­u­fac­tur­ing sec­tors, rose to 53.7 points from 52.6 the month be­fore.

The in­dex, com­piled by re­search firm IHS Markit, is on a 100-point scale, with 50 sep­a­rat­ing growth from con­trac­tion.

The in­crease was led by stronger mo­men­tum in Ger­many, whereas France saw a slow­down.

Over­all, new or­ders and hir­ing in­ten­tions rose. Work back­logs ac­cu­mu­lated at the fastest pace in five years — a pos­i­tive sign for the econ­omy that sug­gests com­pa­nies are en­joy­ing good de­mand.

The re­sults sug­gest the euro­zone is hold­ing up in the face of un­cer­tain­ties in­clud­ing Bri­tain’s vote to leave the Euro­pean Union and a slow­down in global trade.

Chris Wil­liamson, chief busi­ness econ­o­mist at IHS Markit, said that the re­sults are con­sis­tent with the euro­zone econ­omy grow­ing at a quar­terly rate of 0.4 per­cent in the fi­nal three months of the year. That would be a pick-up from the 0.3 per­cent growth in the sec­ond quar­ter.

“With back­logs of work ac­cu­mu­lat­ing at the fastest rate for over five years, busi­ness ac­tiv­ity growth and hir­ing look set to ac­cel­er­ate fur­ther,” he said.

The im­prove­ment may not be strong enough to keep the Euro­pean Cen­tral Bank from ex­pand­ing its bond-buy­ing stim­u­lus pro­gram in De­cem­ber, an­a­lysts say. In­fla­tion, at 0.4 per­cent an­nu­ally, is still far be­low the 2 per­cent tar­get rate.

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