Eurozone business activity expands in November

Eurozone business activity continued to expand in November, flash data from S&P Global showed on Friday.

The HCOB flash eurozone composite purchasing managers' index registered 52.4 points in November, barely changed from 52.5 in October. A reading above 50 indicates growth.

Services remained the key driver of the recovery.

The flash services business activity index edged up to 53.1 points from October's final reading of 53.0, the highest level in 18 months.

Manufacturing growth, however, cooled.

The flash manufacturing PMI dipped back below the neutral mark to 49.7 points from 50.0, signalling mild contraction.

New orders rose for a fourth month but at a softer pace, with improved demand in services offsetting another fall in factory orders. Export demand remained weak, with new export orders declining again.

Employment was unchanged overall, after an increase in October. Employment at services firms rose only slightly, while manufacturing headcounts fell at a faster rate, extending a decline that has now lasted two and a half years.

Input prices rose at the fastest rate in eight months amid higher costs in both services and manufacturing, including a renewed rise in factory input prices.

Output price inflation, however, eased to the slowest pace in just over a year as manufacturers kept selling prices unchanged.

Firms continued to run down inventories, with stock depletion the sharpest in almost a year. Supply chain delays also worsened, with delivery times lengthening at the fastest rate since October 2022.

Business expectations improved from October, with sentiment rising in Germany, France and the rest of the eurozone. Manufacturers posted the strongest rebound, with optimism hitting a five-month-high.

"The eurozone is more or less maintaining its relatively robust expansion rate," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

Final PMI readings for November will be published on December 1 for manufacturing and December 3 for services and the composite index.

The HCOB Eurozone PMI is compiled by S&P Global from a survey of around 5,000 firms across the bloc. The flash estimate is based on 85%–90% of monthly responses.