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Eurozone business growth lost more momentum in Sept: PMI
[LONDON] Eurozone business activity expanded at its weakest rate since the beginning of 2015 last month, according to a survey providing the latest evidence the bloc's economy is losing momentum.
Businesses have reined in spending amid growing caution about the economic outlook and political uncertainty as Britain gears up to start divorce proceedings from the European Union and Germany and France face elections.
Markit's final composite Purchasing Managers' Index for the euro zone was 52.6 in September, matching a flash estimate but below August's 52.9 and its lowest since January 2015. It has been above the 50 mark that divides growth from contraction since mid-2013.
"While the PMI surveys suggest the eurozone economy continued to grow at a 0.3 per cent rate in the third quarter, there are signs that momentum is waning," said Chris Williamson, chief business economist at IHS Markit.
What growth existed was once again lopsided, which may concern policymakers.
"Of the four largest euro states, only France is showing signs of its upturn gaining momentum, with growth trending lower in Germany, Italy and Spain," Mr Williamson said.
But of some relief for the European Central Bank - whose measures have so far failed to get inflation anywhere near the ECB's near 2 per cent target - firms held prices steady last month for the first time since September 2015. The output price index, which has held stubbornly below the 50 mark for most of the past five years, came in on the dividing line.
Growth in the bloc's dominant service industry also dwindled. The PMI fell to 52.2 from 52.8, just above the flash 52.1 reading but its lowest level since late 2014.
With growth rates falling, firms took on fewer new workers than they did in August. The employment sub-index fell to a five-month low of 52.0 from 52.4.