PMI in the Eurozone Reached a 1.5-Year High in October

Significant Increase in Economic Activity in the Eurozone

The Eurozone has seen economic activity surpass expectations as of October 2024, reaching its highest level since May 2024, thanks to strong performance from Germany balancing out weak developments in France.

The S&P Global and Hamburg Commercial Bank (HCOB) composite purchasing managers' index (PMI) rose from 51.2 in September to 52.2 in October. This increase represents the highest level the Eurozone PMI has reached since May 2024.

The median forecast of economists participating in a Bloomberg survey was set at 51.1, remaining above the 50 threshold and continuing to separate growth from contraction.

Strong Performance in Germany

The key driver behind this increase was the services sector. In particular, the Germany composite PMI index reached its highest level since May 2023, climbing to 53.8 points.

Contraction Continues in France

In France, the manufacturing PMI fell to 48.3, the services PMI to 47.1, and the composite PMI to 46.8. These results indicate that the weakness in France's economy persists.

European Central Bank (ECB) Interest Rate Policy

Despite weak economic growth, the European Central Bank (ECB) appears reluctant to lower interest rates. Following eight rate cuts in the past year, it is expected that borrowing costs will be kept stable next week in line with the 2% inflation target.

Economist Cyrus de la Rubia noted that price increases in the services sector have remained moderate: “The inflation rate of selling prices has slightly increased, but it remains close to the long-term average. There are no visible short-term risks.”