Falling output in France and Italy dampens Eurozone growth

Falling output in France and Italy has seen the Eurozone manufacturing and services recovery slow to the weakest level so far this year, figures out this morning show. 

 

Overall the index was 52.5 in the month, down from 53.8 in July – the weakest of the year so far, although any PMI score above 50 indicates expansion.

 

After seven months of growth Italian output contracted last month, largely as a result of the services industry, according to the Markit Eurozone Composit PMI. Manufacturing also saw a sharp slowdown. 

 

France continued to contract – now for four months in a row – although the pace of decline has mellowed. There was a modest increase in the services sector, though manufacturing “remained in deep downturns”. Its overall PMI reading for the month – which saw the dissolvement of the French government – was 49.5. 

 

Ireland remained the strongest performer within the Eurozone, with business activity rising at the quickest pace since August 2000, registering a PMI of 61.8. Spain also saw increased output growth, reaching a seven-and-a-half year high. German continued to grow, albeit at a slower pace for both manufacturing and services. 

 

"The Eurozone economy is defying expectations of gaining momentum, which will no doubt add to calls for the ECB to embark on full-scale quantitative easing," said Markit chief economist Chris Williamson.

 

The ECB is due to make its latest decision on interest rates on Thursday.