Investing.com - Economic activity in the euro zone grew at the fastest pace since May 2011 in November, boosting optimism over the health of the region's economy, preliminary data showed on Monday.
In a report, market research group Markit said that its Flash Euro Zone Composite Output Index, which measures the combined output of both the manufacturing and service sectors rose from 53.9 in October to 54.4 in November, the highest level in more than four years and beating forecasts for 53.9.
The preliminary euro zone manufacturing purchasing managers’ index rose to a seasonally adjusted 52.8 this month, a 14-month high and up from a final reading of 52.3 in October. Analysts had expected the index to hold steady at 52.3 in November.
Meanwhile, the flash services purchasing managers’ index improved to 54.6 this month from 54.1 in October, a 54-month high and above expectations for a reading of 54.1.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The recovery continued to be led by the service sector, where business activity and new business rose at the fastest rates since May 2011 and employment showed the biggest monthly gain for five years.
Moreover, the survey’s employment, new orders and backlogs of work indicators all signaled the strongest monthly expansions in four-and-a-half years.
One area of weakness was France, where business activity rose at the slowest rate for three months, largely reflecting weaker service sector growth.
Growth meanwhile accelerated to a three-month high in Germany, fueled by the biggest monthly improvement in new business for two years.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The data are signaling GDP growth of 0.4% in the closing quarter of the year, with 0.5% in sight if we get even just a modest uptick in December."
EUR/USD was trading at 1.0634 from around 1.0631 ahead of the release of the data, while EUR/GBP was at 0.7016 from 0.7013 earlier.
The Investing.com euro index, which tracks the single currency against a basket of six major rivals, was at 85.75, compared to 85.72 ahead of the report.
Meanwhile, European stock markets were lower after the open. The EURO STOXX 50 shed 0.5%, Germany's DAX slumped 0.3%, France’s CAC 40 declined 0.8%, while London’s FTSE 100 dropped 0.55%.