22 October 2010 |
This month’s Eurozone Purchasing Managers’ Index (PMI) shows the slowest growth for a year.
composite output index, an
average of the manufacturing output index and the services business activity
index, fell for the third month running, dropping to 53.4 from 54.1 in
Released yesterday by financial analyst Markit, it shows
while Eurozone output rose for
the 15th successive month, growth slowed in both manufacturing and services.
This slower output expansion was accompanied by a further loss of momentum of
new orders and employment growth.
An increase in the growth rate of new manufacturing
orders, which was driven by better export sales, was offset by a renewed
slowing of new work for services. A sharp drop in service sector confidence about the year ahead suggested growth in
this area could wane.
Chris Williamson, chief
economist at Markitsaid: “A
weakened order book trend and a sharp deterioration in confidence for the year
ahead in the service sector suggest that we are set to see growth continue to
moderate in coming months. This is likely to be met with a return to job
cutting unless order
books show an improvement soon.
“The weakness of the service sector is a growing
concern, especially as activity fell at an increased rate outside of France and
Germany. Even hitherto resilient France saw a steep slowing in service sector
growth. The region’s recovery therefore appears to be increasingly dependent
upon manufacturers, for whom an upturn in export sales was one of very few
bright spots in the October survey.”
The PMI showed strong growth in France and Germany contrasted
with contraction elsewhere. Outside of these nations, the growth trend
deteriorated for the seventh consecutive month, with output falling for the
first time since November 2009.