The Eurozone's service sector PMI for October revised lower to 52.3

The Eurozone economy was stymied by weak demand and renewed job losses, according to the October composite purchasing managers index (PMI) data published by Markit on Wednesday.

The final Markit Eurozone composite PMI that includes activity in the manufacturing and services sector edged up slightly to 52.1, from the prior month’s reading of 52.0. Readings over 50 indicate an expansion in economic activity.

The general indicator was affected by a slight slowdown in the services PMI which moved down from 52.4 to 52.3 in October.

“The main factor stymieing output growth was the subdued trend in new business inflows,” Markit pointed out in the report.

The slowdown in new order growth was due to lacklustre domestic market conditions, slower global economic growth and ongoing client uncertainty.

Although the reading marked the sixteenth successive month of expansion in the headline index, Markit Chief Economist Chris Williamson considered the data to be worrisome.

“The Eurozone PMI makes for grim reading, painting a picture of an economy this is limping along and more likely to take a turn for the worse than spring back into life,” Williamson explained.

He pointed out that the “near-stagnation” in new orders, showing the worst reading in 15 months, “suggests that the pace of growth may deteriorate in coming months”.

As markets await the European Central Bank (ECB) decision to be announced on Thursday, Williamson affirmed that the combined threat of economic stagnation and growing deflationary risks will add to pressure on the Eurozone monetary authority “to do more to stimulate demand in the euro area, strengthening calls for full-scale quantitative easing”.