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Published: Sat, September 23, 2017
Economy | By Melissa Porter

Eurozone private business growth picks up: PMI

Eurozone private business growth picks up: PMI

Business activity during September saw one of its strongest gains for the past six years, the survey indicated.

The manufacturing index went from 58.2 from 57.4, while services hit 55.6 from 54.7. Improved performances were seen across both manufacturing and services in September, though it was the former that continued to show the much faster rate of expansion.

The US Dollar weakened during noon trading Friday, on multiple factors, ahead of the release of September's PMI surveys for the manufacturing and services industries. While disappointing industrial orders and output data have painted a mixed picture for the economy, IHS Markit said the PMI pointed to an acceleration of economic growth to around 0.7 percent in the third quarter, up from 0.6 percent from April to June.

"The rise in business activity and accompanying build-up of price pressures will fuel expectations that the European Central Bank is poised to announce its intention to rein back some of its stimulus, reducing its asset purchases in 2018".

"The goods-producing sector was again buoyed by rising exports, the rate of growth of which dipped slightly - linked to the recent appreciation of the euro - though remained slightly above the average seen so far this year". The reading was the highest since April 2011 and far exceeded a consensus forecast in a Reuters poll of economists for a stable reading of 55.8.

The IHS Markit composite purchasing managers' index (PMI) revealed that manufacturers in the region had their best month since early 2011. The euro gained 0.4 per cent to $1.1989, on track to end the week higher.

France's composite PMI rose unexpectedly to a 76-month high of 57.2 in September. The factory PMI climbed to 56.0 from 55.8 in the previous month.

"On the eve of the president's signature labor reforms, perhaps the key takeaway of the latest survey is another marked rise in employment", said Alex Gill, economist at IHS Markit.

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