A survey has shown that business activity in the euro zone grew in October at its fastest rate since December 2007.
The euro zone purchasing managers' index (PMI), compiled by data and research group Markit, rose to 53 points from 51.1 in September. In August, it ended 14 months of decline.
Manufacturing output rose for the third month running, at its fastest rate since November 2007. The services sector expanded for a second month in a row, but trailed manufacturing growth. Employment, however, fell for the 16th successive month, though at a slower rate.
Chris Williamson, chief economist at Markit, said the results 'indicate that the euro zone economy has entered the fourth quarter on a strong note, with growth accelerating in both manufacturing and services'. He added that figures in the survey indicated that the labour market could stabilise early next year.
German Ifo highest since September 2008
A separate survey has shown that German business confidence rose in October to the highest level for more than a year.
The Ifo research institute's index gained 0.6 points from September to 91.9, the highest level since September 2008, when the indicator stood at 92.7.
Analysts had forecast a rise to 92 points as Europe's biggest economy pulls out of its worst recession since World War II.
The widely-watched Ifo survey provided more hope that Germany will slowly recover, though it faces potential hurdles stemming from rising unemployment, a possible credit squeeze and the euro's gain in value against the dollar.
The German government has revised its 2009 growth forecast higher, but still expects the economy to contract by around 5%.
