Eurozone economy picks up pace in November: survey

(BRUSSELS) - Eurozone business activity hit a four-and-a-half year high in November, helping create much-needed jobs in a broad-based upturn despite the impact on France of the Paris attacks, a key survey showed Monday.

Data monitoring company Markit said its closely watched Composite Purchasing Managers Index rose to 54.4 points from 53.9 points in October, putting it well above the 50-point boom-or-bust line.

Markit said "employment, new orders and backlogs of work indicators all signalled the strongest monthly expansions in four-and-a-half years."

"The survey data also highlighted the broad-based nature of the upturn."

Markit chief economist Chris Williamson said in the statement that the report was encouraging overall but noted the impact on France of the November 13 Paris attacks which left 130 people dead.

"The improved performance in terms of economic growth and job creation seen in November are all the more impressive given last weekend's tragic events in Paris, which subdued economic activity in France -- especially in the service sector," Williamson said.

For France, the Composite PMI fell sharply to 51.3 points, a three-month low, from 52.6 in October, Markit said in a separate report.

Williamson said the survey suggested the 19-nation eurozone economy could grow 0.4 percent in the last three months of this year and even a modest December performance could make it 0.5 percent.

The eurozone expanded 0.3 percent in the three months to September, down from 0.4 percent in the second quarter.

Williamson said that despite the positive overall report, the European Central Bank may still have to do more to ensure the economy remains on track.

Jessica Hinds, European Economist at Capital Economics, agreed, saying that even if the eurozone economy does grow by 0.5 percent in the fourth quarter, this "will not be sufficient to eat into the vast amount of spare capacity that still exists".

"We therefore doubt that today's data will be sufficient to dissuade the ECB from increasing its monetary support in December," she said in a note.

The ECB launched an unprecedented one trillion euro stimulus programme earlier this year but some analysts believe that with inflation -- a reflection of consumer demand -- well below its near two percent target level, there is much more to be done.