Private activity in the euro zone continues to break records. The composite PMI index of the euro zone stood at 52.5 points in October, 1.3 more than in September, a figure that had not been achieved since May 2023. The data, published this Wednesday by S&P Global and the Hamburg Commercial Bank (HCOB), breaks with the trend of moderate growth in industry and services and allows, according to analysts from both institutions, that the economic recovery of the euro zone “is being consolidated.”
In addition to the boost in tourism, experts from both institutions assure that the improvement in demand conditions and the increase in employment also justify this growth in private sector activity in the euro zone. Thus, new orders increased at the strongest pace in two and a half years, but the tariff war unleashed by the United States continues to hurt demand from international customers, as new export orders continued to fall. As for the , at the beginning of the fourth quarter the best figure in 16 months was achieved as new workers in the tourism sector compensated for the destruction of employment in factories in the euro zone. The 52.5 points achieved clearly place the activity of factories and services in the expansion zone (more than 50 points).
In the contraction zone (less than 50 points) there is only France (47.7 points), while Spain is at the top (56 points) followed by Germany, which achieves its best figure in 29 months (53.9 points), Ireland (53.7 points) and Italy (53.1 points).
With these data, companies in this economic area were optimistic about growth for the next 12 months, although those registered in September.
As for , sales prices rose at their strongest pace since March, while purchase prices recorded their biggest drop since August as, according to analysts, they “adopted a more aggressive stance in pricing.”
Given these data, the chief economist of the HCOB, Cyrus de la Rubia, has pointed out that “finally, there is positive news about the euro zone economy again” and has assured that the recovery of private activity in the euro zone “is being consolidated.” It also focuses on France, as it states that “it is clearly slowing down the economic growth of the euro zone” and calls for it to stop this trend.
“Strong” performance of Spanish tourism
The PMI index of the Spanish services sector, also published this Wednesday, showed a “strong and accelerated rebound in October,” standing at 56.6 points, 2.3 more than in September, thanks to a greater volume of new orders received, experts from both institutions highlight. This increase is explained by the fact that foreign orders barely grew.
These circumstances caused them to rise at the highest rate since July and continue with the upward trend registered for more than three years. On the price side, operating costs increased due to increases in labor, energy and fuel costs. Therefore, companies chose to protect their margins and increase the prices of their sales, which has driven inflation, a trend detected in the last four and a half years.
This momentum has companies optimistic about their prospects over the next 12 months. Thus, they foresee an increase in demand and plan to expand their commercial activities, which allows them to achieve their best figure since March.
With these data, Jonas Feldhusen, junior economist at HCOB, pointed out that “commercial activity in the Spanish services sector rebounded significantly in October” thanks to “a solid entry of new orders, which companies attribute directly to greater market demand.” These good prospects “fuel optimism that 2025 will happen,” he stated.
