Europe’s service and manufacturing industries have expanded this month at the fastest pace in two years after a reviving global economy helped the euro region emerge from the worst recession in more than 60 years.

A composite index based on a survey of purchasing managers in both industries in the 16-nation euro area rose to 53.7 from 53 in October, London-based Markit Economics said today in a statement. That was the highest since November 2007. A reading above 50 indicates expansion.

The European economy is gathering strength after global governments spent billions on stimulus measures to encourage spending. Though euro-area exports increased the most in more than a year in September, the euro’s strength is making goods less competitive abroad just as rising unemployment undermines consumer spending, threatening the recovery.

Governments around the world have spent $2 trillion to fight the recession and the European Central Bank has cut its key interest rate to a record low of 1 percent and purchased covered bonds to stimulate bank lending. ECB President Jean- Claude Trichet said on Nov. 17 that the bank expects the euro-area economy to recover only “at a gradual pace” in 2010. Click here to read the full story.