Eurozone output grows at fastest rate since 2007: Survey

BRUSSELS: Private sector business activity in the 16-nation eurozone grew in October at its fastest rate since 2007, with France leading the way a survey showed on Wednesday, confirming an earlier estimate.

The purchasing managers' index (PMI) for the 16 countries using the single currency, compiled by data and research group Markit, rose to 53.0 points from 51.1 points in September.

In August, it had ended 14 months of decline. "Surging growth in France helped propel the eurozone recovery in October, with the region expanding at the fastest pace since December 2007," said Markit chief economist Chris Williamson.

Germany and Italy are following with more modest rates of expansion, leaving Spain as the only country to see ongoing contraction in October "although even here the rate of decline continued to slow," he added.

The latest figures were well above the boom-bust line of 50 points, a score below 50 indicates a contraction. However the likelihood of further job losses remains a concern, as a period of consolidation is set to occur ahead of any real job creation.

Another concern is that companies still need to offer price cuts to win new business. "But at the moment the eurozone recovery remains firmly on track," Williamson said.

Underlining those factors, the services sector also expanded at its fastest rate in almost two years, since before the economic crash, rising to 52.6, a little higher than an earlier estimate.

This was the second successive monthly increase in activity and the strongest monthly gain since December 2007. However sector job losses remained "severe" and the growth was "largely stimulated by price discounting," said Markit in its analysis.