Eurozone private sector grew at the slowest pace in 20 months in September, flash data from Markit showed Friday. The reading, the strongest since June 2015, lifted the index further above the key 50-point level dividing an expansion in activity from a contraction.
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The Services PMI Activity Index printed 52.1 (21-month low), below the prior and expected 52.8 print.
The euro zone flash composite Purchasing Managers’ Index, seen as a good overall growth indicator, fell to 52.6 from August’s 52.9.
Rob Dobson of Markit, which compiles the figures said: “The Eurozone economy ended the third quarter on a disappointing note”.
France performed far better than expected and is now the standout nation in the continent, overtaking Germany for the first time since 2012.
A Reuters poll of economists had predicted only a slight dip to 52.8.
That, the survey compiler said, “suggested that the economy is losing, rather than gaining, momentum”.
Years of ultra-loose policy have so far failed to get inflation anywhere near the European Central Bank’s 2 percent target ceiling so policymakers may take some cheer from firms halting price discounting for the first time in a year. The score was forecast to remain unchanged at 52.8.
The average index reading of 52.9 over the third quarter was below that of second quarter’s 53.1.
Looking into the report, Markit remarked that it remains clear that the economic upturn is still fragile, inflationary pressures also are still relatively benign and business confidence at the service sector has declined significantly.
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“Weak demand continued to curb inflows of new business and companies reported a lack of work outstanding, boding ill for output growth in coming months”, Oliver Kolodseike, an economist at Markit, said of the German numbers.
