Euro zone economic growth slows to four-month low in October, PMI shows
SPY•The euro zone composite PMI fell to 51.7 in October from 53.1 in September, a four-month low and below the preliminary estimate of 51.9. The survey indicated growth of about 0.3% at the start of the fourth quarter, as demand weakened and cost pressures rose.
1. Growth loses momentum
The S&P Global Eurozone Composite PMI fell to 51.7 in October from 53.1 in September. Readings above 50 indicate growth in activity; the October result was a four-month low and below the preliminary estimate of 51.9. Chris Williamson of S&P Global Market Intelligence said the survey indicated growth of about 0.3% at the start of the fourth quarter.
2. Demand and costs
New orders grew only marginally, while manufacturing and services output expanded at slower rates. Employment fell marginally, and input price inflation reached a five-month high as businesses raised their charges sharply. Business confidence weakened for a third straight month and remained below its long-run average.
3. Regional differences
France slipped back into contraction after a brief recovery in September. Germany, Italy, Spain and Ireland continued to grow, but all lost momentum. The services PMI fell to 51.4 from 53.0, also a four-month low.
