While the eurozone purchasing manager surveys were a little weaker than expected, they still indicated strong levels of growth that will enable businesses to endure any negative impact from upcoming tapering by the European Central Bank.
Following the surveys for October business activity which, including both manufacturing and services, appeared to slow a little from September levels, analysts were quick to point out that they remained robust – particularly among manufacturers in the core countries of Germany and France.
Overall, the composite purchasing manager index (PMI) for October eased to 55.9 from 56.7 in September, but employment remained strong and there were indications that input price rises were starting to take a firmer grip.
Economists eyed the data with European Central Bank monetary policy in mind and the broad assessment was that business activity remained strong enough to withstand any tapering of monthly asset purchases under the Bank's quantitative easing programme.
The analysts say. . .
Pantheon Macroecononmics - Claus Vistesen: "A hit to the services PMI was the primary driver of the lower headline in October, offsetting an increase in manufacturing. Overall new orders growth remained robust, however, propelling job growth to its highest pace since Markit started collecting the data in 1997.
"The dip in the services index to 54.9 has to be watched for further weakness, but for now it signals robust growth in the private sector.
"In addition, strong export orders continue to support activity in manufacturing. The PMI has been too optimistic on GDP growth recently, but the chart shows that the headline index signals strong and stable momentum."
ING - Bert Colijn: "While the drop in the composite PMI could point to a somewhat slower GDP growth in the last quarter of the year, it does seem that growth will remain healthy and that the economy could weather slower asset purchases by the ECB.
"With new orders increasing and export demand picking up, the underlying detail provided enough encouragement for another robust start to the quarter."