An index of activity rose to 52.1 from 50.7 in August, London-based Markit Economics said. A composite gauge of services and manufacturing increased to 52.1 from 51.5. A reading above 50 indicates expansion.
The economy of the 17-nation region is showing signs of recovery since emerging from its longest ever recession in the second quarter. Growth is being led by Germany, where Angela Merkel won an overwhelming endorsement from voters in the general election last Sunday.
“The eurozone economy has ended the third quarter on an encouraging note,” said Martin van Vliet, an economist at ING Bank in Amsterdam. “But a further strong acceleration in the pace of recovery seems unlikely in the near term.”
The manufacturing index declined to 51.1 this month from 51.4 in August. New orders at factories rose for a third month, Markit said. Within services, demand also rose, while expectations for activity in the next 12 months increased to the highest in 18 months.
“The improvement in demand signalled by the data on new business also led to fewer job losses,” Markit said. Payrolls fell the least since Jan 2012 as services employment stabilised.
In Germany, Europe’s largest economy, a services measure surged to 54.4 from 52.8, exceeding the median forecast of economists in a Bloomberg survey. A factory gauge fell to 51.3 from 51.8. The French manufacturing index slipped to 49.5 from 49.7, while services soared to a 20-month high.