Eurozone business growth at the highest level in 9 months, supported by the services sector

A survey showed that strong growth in the services sector gave impetus to business growth in the euro zone this month, expanding much faster than expected, in the latest evidence that the single currency region can escape recession.

Data on Tuesday reported that the S&P Global’s composite purchasing managers’ index for the eurozone, which is a good measure of the general economic condition, rose to 52.3 in February from 50.3 in January.

This is far more than the 50-point level that separates growth from contraction, and it also exceeds all expectations in a Reuters poll, rising slightly to 50.6.

The dominant services sector in the euro zone this month grew at the fastest pace since June, and the PMI for the sector rose to 53.0 from 50.8, beating all expectations in a Reuters poll and well above the median estimate of 51.0.

With recession fears fading, optimism about the full year improved again in February. The business expectations index rose to a nine-month high of 61.5 from 61.2 in January.

However, factory activity fell at an even greater pace this month. The manufacturing PMI fell to 48.5 from 48.8, missing expectations in the Reuters poll for a rise to 49.3 and also below all expectations.

But an indicator that measures output and feeds into the composite PMI rose to 50.4 from 48.9, the first time it has been above 50 since May.