EU manufacturing and services growth gains pace despite crisis
GROWTH in Europe's services and manufacturing industries unexpectedly accelerated for the first time in four months in November as companies weathered the debt crisis and several major economies continued to expand.
A composite index based on a survey of euro-area purchasing managers in both sectors advanced to 55.4 from 53.8 in October. A reading above 50 indicates expansion.
Strong resurgence in private sector growth in Germany and France offset persistent stagnation in periphery members, surveys showed.
Separate data from Germany, Europe's largest economy, showed activity in both its services and manufacturing sectors smashed expectations, with the service sector expanding at its fastest pace since August 2007.
Germany added that its economic growth slowed to a still-healthy 0.7pc in the third quarter, while Italy said consumer confidence unexpectedly rose this month. French manufacturing had its best month in 10 years, but Spain's economy stalled and Greece shrank.
"This is much-needed good news for the eurozone, although it is notable and worrying that the periphery countries still appear to be struggling markedly," said Howard Archer, chief European economist at IHS Global Insight in London.
"It also remains to be seen how resilient activity will be over the coming months as fiscal tightening increasingly kicks in across the region."
Economic growth across Europe "remains unbalanced", said Chris Williamson, chief economist at Markit, which compiled the report. "Growth outside of France and Germany appears to be stagnating."
While the global recovery helped companies from L'Oreal, the world's largest cosmetics maker, to Hochtief, Germany's biggest construction company, to beat third-quarter estimates, the euro's 10pc ascent against the dollar over the past six months may curb the pace of export growth.
Last week, the Organisation for Economic Co-operation and Development cut its global growth forecast for next year. In the euro region, the economy may fail to strengthen in 2011, the Paris-based organisation said. (Additional reporting Bloomberg)