Business activity in the euro zone's dominant services sector surged to a near three-year high in October as businesses and consumers grew more confident about spending, a survey of 2,000 companies showed today.
The headline index in the Reuters survey jumped to 56.0 in October from 53.6 in September, well above the 54.1 consensus forecast and showing the fastest rate of service sector growth since December 2000.
The pace of growth picked up in all five countries covered by the survey - Germany, France, Italy, Spain and Ireland - and the upward jump in the level of the business activity index was the second biggest in the five-year history of the survey.
"It's a very good number, well ahead of consensus expectations," said Ms Geraldine Concagh at AIB in Dublin. "Taken in conjunction with the (Reuters manufacturing survey) numbers that we saw on Monday...this will bolster hopes for a recovery in the euro zone going forward." The global economic recovery of the past few months has been led by the United States, where the comparable index compiled by the Institute for Supply Management will be published at 3 p.m. Irish time.
In the euro zone, the new business index also showed the strongest growth since December 2000, at 55.5 in October from in September.
Job security is key to encouraging consumer spending and the euro zone survey showed service sector employment growing in France, Italy and Spain. However, job cuts in Germany kept the overall employment index below the 50 level that divides growth from contraction, at 48.5 in October from 47.7 in September.
The survey will reinforce expectations that the European Central Bank has finished cutting interest rates and will hold its benchmark rate at 2.0 per cent when it meets tomorrow.