Eurozone service sector activity lost momentum in October, according to PMI signals
By Xavier Fontdegloria
Eurozone service sector growth slowed in October as the rebound from the summer reopening wore off and new public health problems weighed on demand, according to data from a survey of department managers. ‘purchases.
The final Eurozone services PMI reading in October was 54.6, IHS Markit data showed on Thursday. The reading is lower than the 56.4 recorded in September and slightly lower than the preliminary estimate of 54.7. A reading above 50 indicates an expansion of activity, while below this threshold signals a contraction.
The euro zone’s composite production index, which measures activity in the manufacturing and service sectors, fell to 54.2 in October from 56.2 in September, its lowest level in six months.
The service sector continued to be the main engine of economic growth at the start of the fourth quarter, despite the weakening expansion, the data showed. Supply bottlenecks limited production at manufacturers.
âDespite the slowdown, the rate of expansion remains consistent with quarterly gross domestic product growth of 0.5%, but there is a worrying lack of clarity on the direction of travel in the coming months,â Chris said. Williamson, Chief Economist at IHS Markit.
Supply-side constraints have fueled strong inflationary pressures, with input costs and commodity prices rising at record rates, IHS Markit said.
“With supply shortages worsening rather than improving in October, manufacturing growth is expected to remain subdued for some time,” said Williamson. This leaves the eurozone economy dependent on the service sector, and there are already signs that the increase in virus cases is dragging down service activity in many countries like Germany, he said. declared.
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