France and Germany Private Sectors See September Growth Surge

Private sector activity in France and Germany accelerated in September, according to flash survey data released Wednesday by S&P Global. In France, the composite output index rose to 51.2 from 48.5 in August, marking the fastest expansion in over two years and ending a contraction period that began in January. This growth was led by the services sector, which reached a 10-month high of 51.4, while the factory PMI dipped slightly to 50.3.

Germany's private sector also saw significant gains, with its composite output index rising to 53.8, the fastest pace in 11 months. This expansion exceeded economist forecasts and was primarily driven by the service sector, which hit a seven-month high of 52.9. However, Germany's factory PMI declined to 53.8, missing the forecast of 54.1.

Economists noted that while the data suggests European economies are weathering inflation shocks from the Middle East war, long-term durability remains a concern. In France, new orders barely increased and firm expectations for future activity deteriorated, leading analysts to question the sustainability of the current expansion.