Eurozone economy grows at fastest rate in October since May 2023
By Michele Maatouk
Date: Wednesday 05 Nov 2025
(Sharecast News) - The eurozone economy grew in October at the fastest rate since May 2023, according to a survey released on Wednesday.
The HCOB eurozone composite PMI output index - which measures activity in the manufacturing and services sectors - rose to 52.5 from 51.2 in September. This marked a 29-month high and was above the 50.0 mark that separates contraction from expansion.
The services PMI business activity index rose to 53.0 in October from 51.3 the month before, signalling the fastest expansion in output for almost a year-and-a-half.
Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: "Finally, there's something positive to report about the eurozone economy again. The services sector saw a solid upswing in October. When it comes to new business, you'd have to go back to May of last year to find a similarly strong increase. In this environment, service providers also hired more staff than in the previous month, which sparks hope for sustained growth.
"A key driver of growth in the services sector this October was Germany. The jump in the index there - up more than three points to 54.6 - is striking and more than offsets the decline in France, where political tensions are dampening people's willingness to spend. Keeping up this relatively strong growth momentum in the services sector over the coming months won't be easy. In France, political stability would help - passing the 2026 budget would be a step in that direction. In Germany, much will depend on whether the government's stimulus package actually motivates businesses and households to invest and spend more.
"Cost inflation in the services sector has eased a bit, but selling price inflation ticked up. For now, though, there's no sign of broader inflationary pressure. This is because economic growth remains moderate, and the tariff dispute with the U.S. is creating disinflationary effects in the eurozone - partly due to increased imports from China. These PMI figures are unlikely to give the European Central Bank much of a headache.
"France is clearly putting the brakes on eurozone economic growth. On the bright side, it's not just Germany where the expansion rate has picked up significantly. Even when excluding Germany and France, the composite PMIs for the rest of the eurozone show the strongest growth in two-and-a-half years. In this sense, the recovery is gaining broader traction."
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