Euro zone growth slows to 4-month low as costs rise and France contracts, PMI shows
SPY•The euro zone’s Composite PMI Output Index fell to 51.9 in October from 53.1 in September, its lowest reading since June, as rising costs and contraction in France weighed on growth. Business confidence fell to a five-month low, while hiring nearly stalled.
1. Growth loses momentum
The S&P Global Flash Eurozone Composite PMI Output Index fell to 51.9 in October from 53.1 in September, below all forecasts in a poll and its weakest reading since June. A reading above 50 indicates growth.
2. Costs and confidence
Input costs accelerated for a second consecutive month, driven in part by higher energy, fuel and transport costs. Firms raised selling prices more slowly than in September, suggesting some margin compression. Business confidence fell to a five-month low, with optimism dropping most sharply in manufacturing.
3. France and hiring weaken
France’s PMI pointed to economic contraction, and business confidence there fell to its lowest since 2012 outside the pandemic period. New orders grew at their slowest pace in the four-month expansion sequence, while employment barely rose. New export orders increased for a third consecutive month.
