Euro zone businesses had bumper November, sprinting to year-end - PMI

By Jonathan Cable

(Reuters) - Business activity across the euro zone accelerated in November as firms struggled to meet booming

demand, according to a survey giving the latest evidence the bloc's economy was a star performer this year.

Forward-looking indicators in the survey suggest the momentum will be maintained this month.

IHS Markit's final composite Purchasing Managers' Index for the euro zone, seen as a good guide to growth, was confirmed at an earlier flash reading of 57.5, up from October's 56.0.

The PMI scaled its highest level since April 2011 and was comfortably above the 50 mark that separates growth from contraction.

"The euro zone enjoyed a bumper November, setting the scene for a buoyant end to the year," said Chris Williamson, chief business economist at IHS Markit.

 

"Given the strength of order book growth and hiring, as well as the elevated level of business optimism, the euro zone should start the New Year on a solid footing."

An indicator measuring new orders climbed to 57.3 last month from 56.6, a level not seen in almost seven years. As firms struggled to fulfill that demand - despite increasing headcount

sharply - backlogs of work were built up at rates not seen in over a decade.

Williamson said the data were consistent with fourth quarter economic growth of 0.8 percent for the euro zone, faster than many of its peers and more optimistic than the 0.6 percent predicted by a Reuters poll last week.

A PMI covering the bloc's dominant service industry soared to a six-month high of 56.2 from October's 55.0. That upturn coincided with firms raising prices at one of the steepest rates this year. The output price index held steady at October's 52.1.

Signs of stronger pricing pressures, alongside robust growth, will be welcomed by the European Central Bank which has struggled for years to get inflation anywhere close to its near

2 percent target ceiling.

(Editing by Hugh Lawson)