Eurozone business recovery again gains pace

The recovery of the eurozone economy is again gaining pace after dipping last month, a closely watched survey said on Tuesday. 

The IHS Markit purchasing managers' index (PMI), which measures corporate confidence, rose to 55.8 in November after dropping to 54.2 in October. 

This is good news for job creation as the single currency area recovers from the lingering damage of the coronavirus pandemic and global supply chain disruption.

But it comes along with increasing inflationary pressures, with prices and wages rising more steeply.

Chris Williamson, a chief business economist at IHS Markit said: "A stronger expansion of business activity in November defied economists' expectations of a slowdown."

But this is "unlikely to prevent the eurozone from suffering slower growth in the fourth quarter, especially as rising virus cases look set to cause renewed disruptions to the economy in December."  

Economist Rory Fennessy of Oxford Economics agreed that the uptick in the PMI was a surprise, and seemed mainly driven by growth in services.

And he warned that a new wave of coronavirus and ongoing supply chain bottlenecks mean that "the near-term outlook is quickly turning more pessimistic."