Euro zone: private sector activity at its highest since April 2023 in September

Private sector activity in the euro zone experienced its strongest growth in September since April 2023, almost three and a half years, thanks to a rebound in German industry, according to the Flash PMI index published Wednesday by S&P Global. This barometer, calculated on the basis of business surveys, reached 53.1 points, a third consecutive monthly increase and a 41-month high. France is also returning to positive figures, even if the rebound is lighter. The index stood at 51.2 in September, compared to 48.5 in August, marking “a return to growth in private sector activity, a trend putting an end to a phase of continuous contraction that began at the start of the year,” notes S&P Global in its publication.

A figure below 50 points signals a decline in activity. Above this threshold, it reflects expansion. This increase, recorded despite geopolitical tensions and the rise in energy prices, is a “positive signal”, believes Chris Williamson, economist at S&P Global. “Growth in the euro zone manufacturing sector, led by Germany, posted its strongest pace in more than four years in September,” notes the expert, quoted in a press release. This growth, he specifies, was “driven by an increase in spending on artificial intelligence and defense”.

As for the services sector, it also recorded “a renewed expansion during the month, reflecting a general strengthening of economic growth” in the 21 countries sharing the single currency. The private sector is experiencing growth in its activity against a backdrop of still modest job creation, with the geopolitical context “weighing on business confidence and their hiring decisions”. However, “employment increased for a second consecutive month in September, a sign that a growing number of companies are returning to the job market,” underlines Chris Williamson.