Eurozone private sector growth hits two-and-a-half-year high

Investing.com -- The eurozone’s private sector economy expanded at its fastest pace in two-and-a-half years during November, according to the latest HCOB PMI survey data released Wednesday.

The HCOB Eurozone Composite PMI Output Index rose to 52.8 in November from 52.5 in October, marking its sixth consecutive monthly increase and reaching its highest level since May 2023. The reading exceeded the survey’s long-run average of 52.4.

Growth was broad-based across both sectors, though services outperformed manufacturing. The Services PMI Business Activity Index climbed to 53.6 from 53.0 in October, also hitting a 30-month high, while manufacturing production growth slowed to a nine-month low.

All five countries with available composite data reported expansion. Ireland led with its strongest upturn in three-and-a-half years, followed by Spain, which saw the second-fastest growth despite slowing from October’s 2025 high. Italy recorded its strongest activity growth since April 2023, while France saw its first expansion in 15 months. Germany’s growth moderated from October’s 29-month peak.

New business continued to rise for the fourth consecutive month, with the growth rate matching October’s two-and-a-half-year high. This upturn was exclusively driven by services demand, as new factory orders decreased marginally.

Employment increased for the eighth time in nine months, though the pace slowed to a fractional rate. Job creation was entirely driven by service providers, while manufacturers reduced staffing at the fastest rate since April.

Business confidence improved in November across both sectors but remained below the long-term trend. Input price inflation accelerated to an eight-month high, primarily due to rising service sector expenses and a renewed increase in manufacturers’ purchasing costs. Meanwhile, the rate of output charge inflation eased to a six-month low.

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented: "The service sector in the eurozone is showing clear signs of recovery. The strong performance in the service sector was even enough to more than offset the weakness in the manufacturing sector, meaning that economic output in the eurozone grew slightly faster in November than in the previous month."

He added that the eurozone services sector has now grown for six consecutive months, with the geographical breadth of recovery supporting a relatively robust performance. For the coming year, he expects positive stimulus from Germany’s expansionary fiscal policy and Spain’s sustained high economic growth.

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