Business activity in Eurozone accelerated in November, as companies succeeded to raise prices for the first time in over a year. The increase in the Purchase Managers Index (PMI) suggests that the modest recovery in the Eurozone is gaining momentum at the end of the year.
The broader index in industry and services rose from 53.3 points in October to 54.1 points in November, which is the highest value since December last year and also above analysts’ expectations of 53.4 points. The index signals for expansion in the sector and values the moods of the business and investors.
The pickup in activity suggests the Eurozone’s modest economic recovery has gained some momentum as 2016 draws to a close, and is another indication that rising levels of political uncertainty are having little impact on the behavior of businesses or households. The study suggests that higher activity levels will remain in the coming months as new orders also grow at the fastest pace this year. More and more companies expand their capacity due to an increase in orders. This reaches the highest rate of growth in employment by the end of the crisis.
According to the report’s authors, companies have raised prices of their goods and services for the first time since August 2015, which is encouraging for the European Central Bank. The regulator is difficult to encourage inflation to the target level of 2%.
The increasing numbers of firms are boosting capacity as a result of the order book backlog, leading to the joint-largest increase in employment seen this side of the global financial crisis.
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