Europe's Still Growing

According to the Flash, or preliminary, readings of the purchasing managers indexes (PMI), Europe is growing, albeit at a decelerating pace.

France's composite PMI slipped to 50.1 in October from 50.5 in September. From Markit senior economist Jack Kennedy:

"The French private sector economy delivered a flat performance at the start of Q4, as a slower fall in manufacturing output offset a softer showing from the service sector. Although new business slipped ack into contraction, stabilising employment and improved service sector business expectations provide some signs of encouragement as we move towards the end of the year."

Germany's composite PMI fell to 52.6 from 53.2. From Markit's Tim Moore:

"Germany's private sector started the final quarter of 2013 in a positive fashion as manufacturing and service sector output levels both increased from those seen during September. A slower rate of expansion in services activity meant that overall growth eased slightly from the trend recorded over the third quarter.

"However, the stronger manufacturing out turn during October is a signal that the Germany's resilient economic performance has continued this autumn, while sustained gains in new orders suggest that private sector companies will remain on a growth footing in the months ahead."

Eurozone's composite PMI declined to 51.5 from 52.2. From Markit's Chris Williamson:

The dip in the PMI in October is clearly disappointing, but it would be unwise to read too much into one month's data. It's too early to say that the recovery is losing momentum. More important is that the survey data have been running in positive territory for four consecutive months now and indicate that the Eurozone economy expanded at a quarterly rate of 0.2% at the start of the fourth quarter, suggesting an ongoing, albeit sluggish, recovery.

"Although modest, the expansion is reassuringly broad-based across the region, reflecting signs of economic recoveries becoming more entrenched in the periphery as well as ongoing expansion in Germany and stabilisation in France.

"The dip in the PMI will remind policymakers that a sustainable upturn is by no means assured, and adds confirmation to the ECB's view that the recovery is slow, uneven and fragile. Attention is likely to be focused on whether the region requires more policy action to boost the recovery rather than on the timing of any withdrawal of stimulus.

All of this follows news that China's manufacturing sector accelerated sharply in October.