Eurozone PMI rises to highest this year as wheels keep turning in Germany's economic powerhouse

Jasper Jolly
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The wheels are still turning on the Germany, the main driver of Europe's economy (Source: Getty)

There is no sign of Trump-induced hysteria in the Eurozone economy, as an important indicator of economic activity in the bloc's manufacturing and services sectors rose in November despite a slight slowdown in the German economy.

Eurozone composite PMI, which measures overall activity, rose to 54.1 from 53.3 in October, according to data company IHS Markit. It now stands at an 11-month high, its highest point in 2016.

Germany's purchasing managers’ index fell to 54.9 in November from 55.1 last month.

PMI for the German services sector rose to a six-month high, but the composite figure was dragged down by slower growth in Germany's mammoth manufacturing sector. The indicator had risen significantly in October.

Read more: Eurozone PMI reaches 10-month high in October, driven by German growth

The results closely followed the release of equivalent data for France, which showed that Europe's third-largest economy is also in relative good health.

France's composite PMI rose to 52.3 in November, up from 51.6 in October. France's services sector led the growth, despite falls in manufacturing.

PMI is widely regarded as an important indicator of an economy’s health. It measures the level of economic activity across multiple indicators by surveying private-sector companies.

Read more: Irish services growth falls to three year low in wake of Brexit vote

“What’s especially encouraging to see is the buildup of uncompleted orders, which showed the largest rise since May 2011. 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," said Chris Williamson, chief business economist at IHS Markit.

Oliver Kolodseike, economist at IHS Markit, said that Germany's economy is in relative good health, despite the monthly PMI fall: “The latest survey results highlight that Germany’s private sector economy remains in good shape in November.”

“The survey data also signal that a healthy labour market remains one of the mainstays of Germany’s economic upturn,” he added.

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