Euro zone economic growth slowed sharply in October, with the S&P Global Composite Purchasing Managers’ Index (PMI) falling to 51.7 from 53.1 in September. The reading was a four-month low and below the preliminary estimate of 51.9. A PMI above 50 indicates that activity is expanding.
The survey pointed to weaker demand and slower growth in both manufacturing and services. New orders increased only marginally, while demand for services edged down. Export orders rose for a third consecutive month, but at a slower pace. Employment slipped slightly, as falling staffing in services outweighed a small increase in factory headcounts.
Rising costs also weighed on businesses and customers. Input price inflation reached a five-month high, largely linked to higher energy prices, while companies increased their charges sharply, though less than in September. Business confidence fell for a third month and remained below its long-run average.
S&P Global Market Intelligence chief business economist Chris Williamson said the survey indicated growth of about 0.3% at the start of the fourth quarter. He described the pace as respectable but subdued, following stronger performance in the third quarter.
France returned to contraction after a brief recovery in September. Germany, Italy, Spain and Ireland continued to expand, but each lost momentum. The euro zone services PMI also fell, reaching 51.4 from 53.0 in September, its lowest level in four months.
The European Central Bank kept interest rates unchanged the previous week. Economists surveyed by Reuters in October expected another rate increase in December.}
Sources: Investing.com News.