Euro Zone Business Growth Slows to 51.9 PMI as French Turmoil and Energy Costs Bite
Updated
Updated · Reuters · Oct 23
Euro Zone Business Growth Slows to 51.9 PMI as French Turmoil and Energy Costs Bite
3 articles · Updated · Reuters · Oct 23
Summary
The euro zone’s flash composite PMI fell to 51.9 in October from 53.1, the weakest reading since June and below the 52.7 forecast, signaling slower private-sector growth rather than contraction.
Higher energy, fuel and transport costs drove input-price inflation up for a second straight month, while firms raised selling prices more slowly, pointing to margin pressure rather than broad second-round inflation effects.
France was the main drag: business activity slipped back into contraction as political unrest, protests and rising borrowing costs hit demand, while Germany’s private-sector growth also softened.
Demand and labor both lost momentum, with new orders growing at the slowest pace of the four-month expansion and hiring nearly stalling, though export orders rose for a third month after years of decline.
The survey also showed euro-zone business confidence at a five-month low, reinforcing expectations that the ECB will hold rates at 2.50% next week even as inflation remains well above target.
As France faces its worst business confidence since 2012, will its political instability and street protests drag the entire Eurozone into a recession?
Can the European Central Bank justify another rate hike this December while businesses are already absorbing crippling energy costs to survive?
With EU gas storage lagging and prices surging, could Europe's looming winter energy crisis completely derail its fragile economic expansion?