Eurozone business activity slips in August

Business activity in the eurozone slipped in August, according to data released on Monday.

Markit’s final composite purchasing managers’ index – which combines the services and manufacturing sectors – fell to 52.9 in August from 53.2 in July and was down a touch from the flash estimate of 53.3.

Meanwhile, the services PMI fell to 52.8 from July’s 52.9 and the flash estimate of 53.1.

Market said the slowdown was centred on Germany, where output growth fell to its weakest pace in over three years. However, France, Italy, Spain and Ireland all saw rates of increase accelerate since July.

Chris Williamson, chief economist at Markit, said: “It’s clearly disappointing to see the final PMI has come in weaker than the initial flash estimate. While the overall picture is one of steady but sluggish 0.3% growth in the third quarter, the revised figures indicate that the economy is losing rather than gaining momentum.

“Inflationary pressures are also cooling amid intense competition, and hiring is on the wane as businesses grow more concerned about the outlook. The survey data will fuel expectations that the ECB would prefer not to wait before injecting more stimulus into the economy, adding pressure for policymakers to act later this week to help shore up confidence in both the outlook for the economy and the bank’s commitment to its inflation target, even if simply by extending its QE programme.”