Eurozone
business growth cooled in September for a second consecutive month, dropping to
its slowest pace since December, a survey suggests.
The
latest Markit Composite Purchasing Managers' Index (PMI) fell to 52.3 from
August's 52.5.
A
reading above 50 indicates growth.
Modest
growth in Europe's biggest economy, Germany, provided some cheer, but the
eurozone was brought down by stagnation elsewhere, particularly in France,
where PMI fell to 49.1.
Manufacturing
across the eurozone fared worse than the service sector, with the PMI reading
falling to 50.5, the lowest measure since July of last year.
"The
survey paints a picture of ongoing malaise in the eurozone economy," said
Chris Williamson, Markit's chief economist.
"With
growth of output and
demand slowing, employment once again failed to show any meaningful increase. Such torpor meant prices continued to fall as firms fought for customers, which will inevitably heighten concerns that the region is facing deflation."
demand slowing, employment once again failed to show any meaningful increase. Such torpor meant prices continued to fall as firms fought for customers, which will inevitably heighten concerns that the region is facing deflation."
He
added that the European Central Bank (ECB), which is faced with the task of
warding off deflation, would be "disappointed" by the PMI numbers.
'Anaemic demand'
On Monday,
ECB president Mario Draghi said the bank was ready to use "additional
unconventional instruments" to help boost the flagging eurozone economy,
"should it become necessary to further address risks of a too prolonged
period of low inflation".
The
destroyed Lugansk International Airport, eastern Ukraine The Ukraine crisis and
its knock-on effects could affect eurozone growth, Markit says
Earlier
this month, the European Central Bank introduced new measures to stimulate the
area's flagging economy.
As
well as launching an asset purchase programme, through which it will buy debt
products from banks, the ECB cut its benchmark interest rate to 0.05%.
Business
growth in France slumped to a three-year low, with both the manufacturing and
service sectors suffering.
"Anaemic
demand continues to hold back the private sector," said Jack Kennedy, a
senior economist at Markit, "with further price cutting insufficient to
prevent new orders from falling".
In
Germany, service sector growth rebounded to a two-month high, but manufacturing
growth recorded its slowest growth for 15 months.
Markit
economists also raised concerns about the crisis in Ukraine, and related
Russian sanctions, which they warned could have further adverse effects on
business in Europe.
"The
danger is that the ECB's efforts to stimulate the economy will prove
ineffective in the face of such headwinds, which are exacerbating already-weak
demand," said Mr Williamson.
BBC
Business
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