Eurozone Economy Surges: Service Sector Fuels Record Growth

The euro zone economy burst into dynamic growth mode in October, recording its most rapid expansion since May 2023, according to a latest survey. Spearheading this growth spurt was the service sector, which saw an impressive upswing as demand conditions improved, said the HCOB Eurozone Composite Purchasing Managers' Index (PMI) compiled by S&P Global.

The PMI, which rose to 52.5 in October from 51.2 in September, marked the tenth straight month of expansion, soaring to its highest level in 29 months. Readings above 50 indicate growth, and current figures reflect a significant departure from the earlier subdued growth pattern. Service sector activities led the charge, with new business volumes expanding at unprecedented rates in years.

Geographically, Spain excelled with a composite 56.0 reading. Meanwhile, Germany reported a strong rise to 53.9, with Italy and Ireland not far behind. France, however, continued in contraction territory, which tempered overall optimism. While services ramped up employment, manufacturing struggled. Eurozone price trends saw a divergence, though inflation remained within targets, influencing European Central Bank monetary policies.