AFP - Private sector business activity in the 16-nation eurozone grew in October at its fastest rate since December 2007, a closely-watched survey showed on Friday.

The purchasing managers' index (PMI) for the 16 countries using the single currency, compiled by data and research group Markit, rose to 53.0 points from 51.1 points 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.

Chris Williamson, chief economist at Markit, said the results "indicate that the eurozone economy has entered the fourth quarter on a strong note, with growth accelerating in both manufacturing and services."

"Reassuringly, job losses also slowed, and forward-looking indicators such as service sector confidence and manufacturing order-to-inventory ratios suggest that the labour market could stabilise early next year," he added.

Howard Archer, chief economist at IHS Global Insight, nevertheless cautioned that "eurozone economic activity is still hardly racing ahead and serious obstacles remain to sustainable healthy growth." He cited the euro trading high at 1.50 dollars.