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Eurozone services gather momentum, reaches 27-month high: Markit

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Eurozone services gather momentum, reaches 27-month high: Markit

The Eurozone service economy continued to gather momentum in September after job losses eased to a very modest pace, according to a monthly report from Markit Group. Eurozone Services PMI rose to a 27-month high of 52.2, as the currency bloc continues to pull out of the worst recession in its history.

New business was the main catalyst for service expansion, as companies benefited from stronger demand domestically and internationally. Service sector output expanded for the second consecutive month, as business confidence rose to its highest level since March 2012. Higher output and new business helped employment stabilize after 20 consecutive months of job loss. Ireland and Germany reported the strongest rate of job growth, while the rate of job loss declined in France, Italy and Spain.

Earlier in the week Markit data confirmed the Eurozone manufacturing industry expanded throughout the third quarter, helping to lift the sector out of recession. According to Chris Williamson, chief economists at Markit, growth in manufacturing and non-manufacturing activities confirms the Eurozone “enjoyed its strongest quarter of expansion for just over two years in the third quarter.”

In a separate release, Markit confirmed Germany’s service economy expanded at its fastest rate since February. The monthly PMI reading of 53.8 clipped the previous month’s reading of 52.8, which was also the seven-month high. New business opportunities and improvements in new order volumes helped spur Germany’s service economy in September, which in turn underpinned more optimistic business expectations for the year ahead. Higher levels of business activity contributed to the fastest rate of job growth in almost a year and a half, helping to lessen the effects of backlogs. Across the private sector as a whole, new business increased for the third consecutive month.

According to Markit senior economist Tim Moore, Germany’s service economy finished the third quarter “on an especially positive note,” which will “underpin hopes for a reasonably strong end to 2013 for the service economy.”

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