By Jonathan Cable
LONDON, Nov 23 (Reuters) - Economic recovery in the struggling euro zone accelerated this month as a resurgence in private sector activity in Germany and France offset stagnation in periphery members, surveys showed on Tuesday.
Markit's Eurozone Flash Services Purchasing Managers' Index, made up of surveys of around 2,000 businesses ranging from banks to hotels, bounced to 55.2 in November from a final reading of 53.3 in October.
The index comfortably exceeded expectations it would fall to 53.1 and has now been above the 50.0 mark that divides growth from contraction since August 2009.
"It's very much a Franco-Germany growth performance story. Outside of France and Germany the indications are that we may have stopped contracting but at best we are stagnating there," said Chris Williamson at Markit.
Earlier data from Germany, Europe's largest economy, showed activity in both its services and manufacturing sectors smashed expectations, with the service sector expanding at its fastest pace since August 2007.
In neighbouring France the manufacturing sector had its best month in 10 years, while its services sector came in much better than expected but smaller bloc members continue to struggle.
The European Union and International Monetary Fund agreed on Sunday to help bail out Ireland with loans to tackle its banking and budget crisis in a bid to protect Europe's financial stability.
That will be the second euro zone bailout in six months, after Greece accepted help in May and there are concerns that this may not be the last rescue package in the region.
The euro zone as a whole escaped from its deepest recession in post-war history in the third quarter of last year, having pumped billions of euros into recovery measures, and relatively strong second-quarter growth of 1.0 percent surprised markets.
But growth slowed to 0.4 percent in the third quarter and analysts in a Reuters poll expect the economy to expand by between 0.2 and 0.4 percent per quarter through to the end of next year.
The manufacturing sector, the main driver of the economic recovery last year, also beat expectations in November.
The euro zone flash manufacturing index rose to 55.5 in November from a final reading of 54.6 in October, beating forecasts for a dip to 54.4, while the output index jumped to 55.9 this month, from 54.7 in October.
The composite index, made up from the services and manufacturing sectors and often used to predict overall growth, leapt to 55.4 this month from 53.8 in October, confounding expectations for 53.6.
"We are consistent with (fourth-quarter economic) growth of about 0.5 percent," Williamson said.
BACKLOGS BREAK EVEN
The service sector backlogs of work index jumped to 49.9 this month from October's 48.8 -- the first time it had been below break even since the start of the year -- suggesting the upturn was being driven by new business rather than working down existing orders.
Manufacturing firms were able to pass on rising input costs to customers while still increasing business as the output price index climbed to 54.9 this month from October's 53.8, its highest reading since September 2008.
Prices in the 16-nation bloc rose 1.9 percent in October, nudging closer to the European Central Bank's 2.0 percent target ceiling.
The composite employment index will provide some cheer to policymakers as it climbed to 53.0 from October's 51.1, its highest reading since February 2008.
Official figures showed euro zone unemployment rose to 10.1 percent in September and economists in a Reuters poll see it rising higher next year. (Editing by Susan Fenton)