Eurozone Business Activity Surges to 17-Month High in October Despite French Economic Struggles

Eurozone business picked up in October, its highest rate in 17 months, with robust expansion in the service industry and a sustained improvement in manufacturing. The Composite Purchasing Managers Index, or PMI, moved up to 52.2 from 51.2 in September, the tenth consecutive month above the growth threshold of 50.

The region's biggest economy, Germany, led the charge with its PMI rising to 53.8—its highest level in 29 months—thanks to a strong services sector and consistent manufacturing growth. New orders in the euro area surged at the two-and-a-half-year best pace, prompting firms to rehire after a temporarily decelerated rate last September.

However, France continued to weigh down regional recovery. It recorded its fourteenth successive month of decline with its Composite PMI at less than 50. Political uncertainty and weak demand cut business confidence, which has raised eyebrows about France as a key consumer in the Eurozone.

Outside France and Germany, the rest of the euro zone saw the sharpest growth in activity since mid-2023. The divergence highlights the asymmetry of the recovery as some economies are doing well but others remain weak to gain momentum.

The Euro also continued to show signs of stabilization, particularly against the Swiss Franc, in the wake of the positive PMI readings. With the fourth quarter starting, the economic outlook of the Eurozone is at least optimistically hopeful, though with obstacles in maintaining balanced growth among members.