Euro Area Private Sector Hits 41-Month Demand High

The euro area private sector grew at its fastest rate in nearly three and a half years during September, according to final purchasing managers' survey data from S&P Global. The composite output index rose to 53.1, supported by growth in both the manufacturing and service industries. Composite demand reached a 41-month high, while foreign orders expanded at the sharpest rate seen in over four and a half years.

Regional performance varied across member states. Spain remained the fastest-growing economy in the region, while France and Germany saw their fastest expansions in over two years and nearly one year, respectively. In contrast, Italy's private sector growth slowed to its lowest pace in three months.

Chief Business Economist Chris Williamson noted that the PMI surveys signal GDP growth at a 0.4% quarterly rate with accelerating momentum heading into the fourth quarter. However, intensifying price pressures suggest inflation may run closer to 4 percent, a development that could prompt more aggressive monetary policy tightening.