Eurozone Private Sector Logs Strongest Growth In 16 Months

(RTTNews) - The euro area private sector expanded the most in 16 months in September driven by the acceleration in services activity growth, flash survey results published by S&P Global revealed on Tuesday.

At 51.2, the HCOB composite output index climbed slightly from August's 51.0 and was above forecast of 51.1. The index posted above the 50.0 no-change mark for the ninth straight month in September.

The overall improvement was due the service sector posting the fastest growth in 2025 so far. Manufacturing output also increased but the rate of expansion eased from the near three-and-a-half year high seen in August, the survey showed.

The services Purchasing Managers' Index hit a nine-month high of 51.4, up from 50.5 in August. The score was forecast to rise marginally to 50.6.

Meanwhile, the factory PMI dropped to 49.5 from 50.7 in the prior month. Economists had forecast the reading to remain unchanged at 50.7.

The survey showed that new business was unchanged in September after posting its first increase in 15 months in August. New export orders decreased in each month since March 2022 and the latest drop was the sharpest in six months.

Ending a six-month sequence of job creation, employment was stable in September. Staffing in the services sector continued to rise, while manufacturing employment fell further.

Regarding prices, the survey showed that input cost inflation softened in September and overall output prices grew at the slowest pace since May.

Purchasing activity and stocks of purchases in the manufacturing sector declined in September. Stocks of finished goods also dropped.

Business sentiment deteriorated to a four-month low in September. The weakness was centered on the manufacturing sector as services sentiment was broadly unchanged from August.

Germany was a key driver of growth, registering a solid increase in output that was the joint-fastest since May 2023. On the other hand, France contracted for the thirteenth consecutive month.

Underpinned by a renewed upturn in the service sector, Germany's private sector growth strengthened. The flash HCOB composite output index rose to 52.4 in September, while it was expected to remain unchanged at 50.5.

The services PMI rose to an eight-month high of 52.5 from 49.3 in the previous month. The reading was also above forecast of 49.5.

By contrast, the factory PMI declined to 48.5 from 49.8 in the previous month. The reading was seen at 50.0.

France's private sector shrank the most in five months in September. The flash composite output index fell unexpectedly to 48.4 from 49.8 in the previous month. The reading was forecast to rise to 49.9.

There were renewed weakness in both manufacturing and services. The services PMI posted 48.9, down from 49.8 in August. The score was seen at 49.7.

Likewise, the manufacturing PMI slid more-than-expected to 48.1 in September from 50.4 a month ago. The score was expected to fall to 50.2.