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Oct 24, 11:15 AM EDT

Eurozone business activity grows at fastest pace this year

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Eurozone business activity grows at fastest pace this year

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LONDON (AP) -- Business activity across the 19 eurozone economies grew in October at its fastest pace so far this year, shrugging off any major concerns about Britain's "Brexit" vote, a survey showed Monday.

The purchasing managers' index, a survey of activity among 5,000 companies in the services and manufacturing sectors, rose to 53.7 points from 52.6 the month before.

The index, compiled by research firm IHS Markit, is on a 100-point scale, with 50 separating growth from contraction.

The increase was led by stronger momentum in Germany, whereas France saw a slowdown.

Overall, new orders and hiring intentions rose. Work backlogs accumulated at the fastest pace in five years - a positive sign for the economy that suggests companies are enjoying good demand.

The results suggest the eurozone is holding up in the face of uncertainties including Britain's vote to leave the European Union and a slowdown in global trade.

Chris Williamson, chief business economist at IHS Markit, said that the results are consistent with the eurozone economy growing at a quarterly rate of 0.4 percent in the final three months of the year. That would be a pick-up from the 0.3 percent growth in the second quarter.

"With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further," he said.

The improvement may not be strong enough to keep the European Central Bank from expanding its bond-buying stimulus program in December, analysts say. Inflation, at 0.4 percent annually, is still far below the 2 percent target rate.

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