Business activity in the eurozone grew faster than expected in September, offering a sign of resilience as higher energy costs put pressure on companies and households.
S&P Global’s preliminary composite Purchasing Managers’ Index rose to 53.1, up from 52.0 in August. A reading above 50 indicates growth. Economists surveyed by Reuters had expected the index to fall to 51.7; instead, it reached its highest level in more than three years.
The improvement extended across manufacturing and services. Activity expanded solidly in Germany, while France recorded its fastest growth in just over two years as demand for services recovered. New orders across the eurozone also rose at their quickest pace in more than four years.
The stronger figures come with a complication: businesses reported rising costs, partly driven by energy prices, and passed some of those increases on to customers. That combination of growth and price pressure could strengthen the case for further European Central Bank interest rate increases.
September’s survey is an encouraging snapshot, but it does not settle how long the improvement will last. Businesses and households still face the effects of expensive energy and disruptions linked to the wars in the Middle East and Ukraine.
