Recovery in euro zone services sector picks up in September: PMI

Thu Oct 3, 2013 5:49am EDT
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LONDON (Reuters) - The nascent recovery in euro zone businesses strengthened in September as order books filled at a faster rate and layoffs slowed to a trickle, surveys showed on Thursday, pointing to very mild growth in the third quarter.

Markit's Euro zone Services Purchasing Managers Index (PMI), a monthly survey of businesses, rose to 52.2 in September from August's 50.7, little changed from a preliminary reading of 52.1. Readings above 50 signify growth.

Growth in services companies, comprising the vast bulk of the euro zone's private sector, increased at the fastest pace since June 2011, offsetting a slightly slower pace of expansion in manufacturing last month.

Germany again led the expansion, while services firms in the bloc's next largest economies - France and Italy - returned to growth after more than a year in the red.

Spanish services businesses, however, disappointed slightly, slipping back into contraction after achieving modest growth in August.

"With the rate of expansion picking up in September, the survey bodes well for ongoing growth in the final quarter of the year," said Chris Williamson, chief economist at PMI compiler Markit.

But he added that the region was not out of the woods yet.

"The political instability that has reared up in Italy is a reminder that there remains plenty of scope for recoveries to be derailed," said Williamson.

Italian Prime Minister Enrico Letta won a confidence vote in parliament on Wednesday after Silvio Berlusconi, facing revolt in his own party, backtracked on threats to bring down the government.   Continued...

A woman walks past an empty restaurant in the Andalusian capital of Seville January 23, 2013. REUTERS/Marcelo del Pozo