Eurozone Private Sector Growth Slows Further In September

Eurozone private sector growth moderated for the second straight month as shortages of inputs impeded both manufacturing and service sector output, final data from IHS Markit showed on Tuesday.

The final composite output index fell to 56.2 in September from 59.0 in August. The flash reading was 56.1. Nonetheless, a reading above 50.0 indicates expansion.

“Although for now the overall rate of expansion remains relatively solid by historical standards, the economy enters the final quarter of the year on a slowing growth trajectory,” Chris Williamson, chief business economist at IHS Markit said.

The rates of growth were considerably slower than in August in both manufacturing and services sectors. The services Purchasing Managers’ Index dropped to 56.4 from 59.0 in the previous month. The reading was slightly above the flash 56.3.

The survey showed that there were softer rates of expansion in both new orders and employment, while businesses’ output expectations were the least optimistic since February.

On the price front, the survey showed that input prices climbed at the joint-fastest rate on record. Output prices rose at a pace which was only surpassed by those seen in June and July.

The country split revealed a broad-based loss of growth momentum in September.

Germany’s private sector grew at the slowest pace since February. At 55.5, the composite output index fell from 60.0 in August as both manufacturing and services showed a further loss of momentum.

The services PMI slid to 56.2 from 60.8 in the previous month. The flash score was 56.0.

France’s composite output index registered 55.3 in September, down from 55.9 in August to signal the weakest rate of growth since April. The score was above the flash 55.1.The sector marked a further step down from the recent peak in July.

The services PMI dropped marginally to 56.2 from 56.3 in August. The flash reading was 56.0.

Italy’s private sector logged an eighth consecutive monthly expansion but was down from August’s 15-year peak. The composite output index decreased to 56.6 from 59.1 a month ago.

The services PMI fell to 55.5 from 58.0 in August. Economists had forecast the index to drop moderately to 56.5.

Spain’s private sector grew at the slowest pace since April. The composite output index eased to 57.0 in September from 60.6 in the previous month. The services PMI came in at 56.9, down from 60.1 a month ago and also below economists’ forecast of 58.0.

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