Eurozone activity rises

Manufacturing output

The 16-nation eurozone economic activity has risen at its fastest pace in November for two years a study has revealed.

Markit's Eurozone Flash Service Purchasing Managers Index (PMI) composed of surveys of around 2000 companies ranging from cafes to banks rose to 53.2 in November from 52.6 in October, its highest since November 2007.

That was the third month in a row the index was above the 50 mark separating growth from contraction, and beat economists' expectations for it to hit 52.8.

It's said that the growth was driven by manufacturing output, which scored 54.6, its fastest growth since September 2007.

Figures released earlier this month showed that the eurozone emerged from recession between July and September, the BBC states.

Earlier data showed Germany's industrial and services economies picking up again, while France powered forward with its services PMI cruising to its highest level since October 2006.

Both countries made their way out of recession in the second quarter of the year, followed by Italy in the third, and leaving only Spain among the four largest economies still stuck in a heavy recession, Reuters stated.

Economic activity

Any PMI score above 50 indicates an expansion in economic activity.

"The November survey suggests that the eurozone continued to expand at a robust pace, raising hopes that GDP growth in the final three months of the year could outpace the 0.4 percent rise seen the third quarter," said Chris Williamson at Markit Economics, which compiles the PMI.

Yet he added that the new orders index fell to its lowest level since February. This, together with rising unemployment, "highlighted the fragility of the recovery," he said.

"However, we also saw the first signs of growth peaking, with the new orders index falling for the first time since it hit a record low in February. The sustained steep rate of job losses further highlighted the fragility of the recovery, reflecting an ongoing need to cut costs and uncertainty regarding the economic outlook," he added.

Despite the two-year high, analysts were not getting carried away by the survey.

"The eurozone numbers are not going to set anything alight," said Peter Dixon at Commerzbank.

"It's an expansion that is consistent with [a recovery] which is slow and steady and [the eurozone economy] will probably continue to expand for some months to come, but I don't think we should be expecting a massive pick-up in activity from here."

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