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Growth indicator shows eurozone regaining steam

(BRUSSELS) - Private sector manufacturing regained steam in the eurozone in November after three months of decline but the recovery was uneven across the 16-nation bloc, a key survey showed Tuesday.

Eurozone powers Germany and France led the recovery with output rising in both countries while the rest of the region experienced "sluggish growth," according to the purchasing managers' index (PMI).

Services activity rose modestly for the first time in three months outside the zone's two biggest economies but manufacturing output growth "slipped to the slowest for a year," said data group Markit, which compiles the PMI.

The index, an indicator of industrial and services activity, rose to 55.4 points in November after falling to 53.8 points in October, which was an eight-month low. A reading above 50 points signals growth.

"The flash PMI readings for November indicate that the eurozone regained some of the growth momentum that had been lost since July's peak," Markit chief economist Chris Williamson said.

He noted that employment grew at the fastest rate since February 2008, indicating that "unemployment should soon start falling from September's all-time high and the recovery can move to a more mature, sustainable phase."

The manufacturing sector index alone rose to 55.5 points in November from 54.6 points in October, to hit its highest level in four months.

The services indicator jumped to 55.2 points from 53.3 points.

"However, growth remains very unbalanced, led by a renewed surge of output and employment in Germany -- which is driving economic growth at almost twice the euro area average -- while the periphery continues to struggle with extremely tough conditions," Williamson said.

"Growth outside of France and Germany appears to be stagnating at best," he said, adding that eurozone growth in the final quarter "looks unlikely to exceed 0.5 percent."

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