- Euro-Area Services Sector Remains Steady in September
The Euro-area services sector grew at a steady pace in September despite rising consumer prices.
IHS Markit’s report showed the region services sector rose to 55.8, better than the revised 54.7 recorded in August –previously reported as 55.6.
Output prices rose slightly from 51.3 in August to 51.8 in September. A reading above 50 signifies expansion.
“The economy enters the fourth quarter with business energized by inflows of new orders growing at the fastest rate for over six years and expectations of future growth reviving after a summer lull,” said Chris Williamson, a chief business economist at IHS Markit.
Similarly, the manufacturing sector rose to a 6.5-year high in September, suggesting that growth in the region is broad-based and continuous. The manufacturing activities rose to 58.1 in the month, while job creation climbed at the fastest pace since 1997.
According to Williamson, the strong economic data released so far pointed to 0.7 percent growth rate in the third quarter, faster than the 0.5 percent predicted by most experts.
However, inflation rate remains weak in September, according to the Eurostat data released last week. Meaning weak price pressure is likely to weigh on monetary outlook as policymakers look to pressure prices with loose monetary policy.
Experts believe the European Central Bank would extend its ongoing quantitative easing program on October 26 by a six-month extension and cut its purchase to 40 billion euros from January 2018.
Euro single currency outlook remained mixed for the week as the uprising in Spain and surprised election outcome in Germany cast doubt on economic prospect.