Euro zone services sector activity expanded further in November – PMI

Eurozone Composite Purchasing Managers’ Index (PMI), which tracks performance of both, manufacturing and services sector, and indicates overall economic health, rose to 52.8 in November from 52.5 in October, marking its sixth monthly increase.

The services PMI rose to 53.6 in November (the highest in 2 ½ years) from 53.0 in October and beat forecast at 53.1, with strong acceleration in new business volumes growth being mainly behind the upbeat November’s numbers.

The latest data adds to signals that services sector remains in recovery phase that continues to counter negative impact from weakening manufacturing sector, as Manufacturing PMI returned to negative territory after touching 50 threshold that divides contraction from growth last month.

Separate reports from bloc’s member countries also showed further expansion in business activity, which adds to optimism, despite signs of struggling in manufacturing sector, as employment in services sector continues to rise and partially offset sharp decline in hiring in manufacturing.

November’s data contributes to overall improving sentiment, along with slight improvement in business confidence, however, persisting inflationary pressure, presented through rising manufacturers’ purchasing costs and expenses, suggests that companies should remain cautious about future conditions.