Eu­ro­zone busi­ness ac­tiv­ity slows more than thought in Sept.: data

The China Post - - WORLD BUSINESS -

Eu­ro­zone eco­nomic ac­tiv­ity slowed more than first thought in Septem­ber, a key busi­ness sur­vey showed on Mon­day, adding to con­cerns over the out­look.

Data mon­i­tor­ing com­pany Markit said its re­vised Septem­ber Pur­chas­ing Man­agers In­dex fell to 53.6 points, com­pared with a first read­ing of 53.9 points.

The PMI, a closely watched in­di­ca­tor, stood at 54.3 points in Au­gust, well above the 50-point boom- or- bust line as hold­ing near the best per­for­mance in four years.

An­a­lysts had wel­comed the orig­i­nal Septem­ber fig­ures as show­ing the 19-na­tion eu­ro­zone econ­omy con­tin­ued on track for a mod­est re­cov­ery.

But they also ex­pressed con­cern at the slow­down, warn­ing that the Euro­pean Cen­tral Bank might have to boost its al­ready mas­sive, one tril­lion eu­ros stim­u­lus pro­gram, if the slide con­tin­ued.

The data emerged as eu­ro­zone fi­nance min­is­ters were set to meet Mon­day for the first time since Greek vot­ers re- elected left­ist premier Alexis Tsipras, who now faces the task of im­ple­ment­ing Athens’s cash- for­reforms bailout deal.

Markit chief economist Chris Wil­liamson said the latest fig­ures sug­gested the eu­ro­zone econ­omy would grow 0.4 per­cent in the third quar­ter, the same as in the three months to June.

“How­ever, the fail­ure of the econ­omy to pick up speed over the sum­mer will be a dis­ap­point­ment to the ECB, es­pe­cially with job cre­ation slid­ing to an eight­month low,” Wil­liamson said.

“The weak­en­ing of the pace of ex­pan­sion in Septem­ber raises the risk of growth fad­ing fur­ther in the fourth quar­ter which would in turn boost the like­li­hood of the ECB open­ing the ... taps fur­ther,” he said.

Howard Archer of IHS Global In­sight said the latest fig­ures “sug­gest that the risks to the growth out­look are cur­rently more to the down­side.”

If the sit­u­a­tion gets worse, then the ECB will have to step in and do more although for the mo­ment the cen­tral bank ap­pears to be in “wait and see” mode, Archer said.

In the mean­time, the econ­omy “should be able to achieve on­go­ing mod­est, if un­spec­tac­u­lar growth over the com­ing months,” he said, cit­ing the pos­i­tive im­pact of lower oil and com­mod­ity prices on con­sumers.

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