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Brussels and London - Eurozone business activity continued to pick up in September, hitting a 27-month high that offered a fresh hope of recovery gathering pace, key surveys showed on Thursday.
A return to growth last month for French and Italian companies buttressed a tentative economic recovery in Europe, where Britain and Germany continued to lead the way.
The Composite Purchasing Managers' Index increased to 52.2 points in September after 51.5 in August, according to a second estimate by Markit Economics, which compiles the closely-watched survey.
A first estimate had shown the index at 52.1 points.
The index, considered a reliable leading indicator of the economic climate, has improved in each month since March, remaining above the 50-mark that signals expansion throughout the third quarter.
This strengthens hopes that the eurozone is emerging from the longest recession in its history.
"The final PMI confirms...that the eurozone enjoyed its strongest quarter of expansion for just over two years in the first quarter," said Markit economist Chris Williamson.
But while the survey "bodes well for ongoing growth in the final quarter of the year...the region is by no means out of the woods yet" with growth remaining modest, Williamson added.
In Italy, the strength of the services PMI surpassed all expectations from economists polled by Reuters, suggesting the euro zone's third-biggest economy was on course to pull out of its longest recession in six decades.
Not all is well
Berenberg senior economist Christian Schulz noted that "Italy seems to finally live up to its potential" and added that after Prime Minister Enrico Letta's victory over Silvio Berlusconi "there is further upside potential for confidence in Italy."
But he cautioned that "not all is well", notably on the jobs front.
"Employment has not turned the corner yet, according to the PMIs, suggesting that peak unemployment may not have been reached yet," Schulz said.
Meanwhile the EU's Eurostat data agency said retail prices rose 0.7% in August against 0.5% the previous month.
British businesses ranging from huge financial corporations to hairdressers again reported solid growth, rounding off the strongest quarter in more than 16 years.
Overall, the surveys painted a slightly brighter picture than the "weak, fragile and uneven" recovery alluded to on Wednesday by European Central Bank president Mario Draghi.
On balance, they also boded well for the global economy.
The main disappointment in Europe was Spain, where a rise in business activity during August - the first in more than two years - proved short-lived as firms slipped back into decline.
Italian Prime Minister Enrico Letta won a confidence vote in parliament on Wednesday after Silvio Berlusconi, facing revolt in his own party, backtracked on threats to bring down the government.
The Italian services PMI topped the 50 growth threshold last month for the first time since May 2011, which could signal a timid recovery towards the end of the year.
Indexes from China showed growth picking up there, even if data due later from the US are expected to show a slight easing in the expansion for non-manufacturing companies, which have consistently outpaced their European peers.
A return to growth last month for French and Italian companies buttressed a tentative economic recovery in Europe, where Britain and Germany continued to lead the way.
The Composite Purchasing Managers' Index increased to 52.2 points in September after 51.5 in August, according to a second estimate by Markit Economics, which compiles the closely-watched survey.
A first estimate had shown the index at 52.1 points.
The index, considered a reliable leading indicator of the economic climate, has improved in each month since March, remaining above the 50-mark that signals expansion throughout the third quarter.
This strengthens hopes that the eurozone is emerging from the longest recession in its history.
"The final PMI confirms...that the eurozone enjoyed its strongest quarter of expansion for just over two years in the first quarter," said Markit economist Chris Williamson.
But while the survey "bodes well for ongoing growth in the final quarter of the year...the region is by no means out of the woods yet" with growth remaining modest, Williamson added.
In Italy, the strength of the services PMI surpassed all expectations from economists polled by Reuters, suggesting the euro zone's third-biggest economy was on course to pull out of its longest recession in six decades.
Not all is well
Berenberg senior economist Christian Schulz noted that "Italy seems to finally live up to its potential" and added that after Prime Minister Enrico Letta's victory over Silvio Berlusconi "there is further upside potential for confidence in Italy."
But he cautioned that "not all is well", notably on the jobs front.
"Employment has not turned the corner yet, according to the PMIs, suggesting that peak unemployment may not have been reached yet," Schulz said.
Meanwhile the EU's Eurostat data agency said retail prices rose 0.7% in August against 0.5% the previous month.
British businesses ranging from huge financial corporations to hairdressers again reported solid growth, rounding off the strongest quarter in more than 16 years.
Overall, the surveys painted a slightly brighter picture than the "weak, fragile and uneven" recovery alluded to on Wednesday by European Central Bank president Mario Draghi.
On balance, they also boded well for the global economy.
The main disappointment in Europe was Spain, where a rise in business activity during August - the first in more than two years - proved short-lived as firms slipped back into decline.
Italian Prime Minister Enrico Letta won a confidence vote in parliament on Wednesday after Silvio Berlusconi, facing revolt in his own party, backtracked on threats to bring down the government.
The Italian services PMI topped the 50 growth threshold last month for the first time since May 2011, which could signal a timid recovery towards the end of the year.
Indexes from China showed growth picking up there, even if data due later from the US are expected to show a slight easing in the expansion for non-manufacturing companies, which have consistently outpaced their European peers.
