Eurozone Markit services PMI touch higher than expected

Markit’s final eurozone composite output index printed at 52.6 in September, in line with the flash estimate but down from August’s reading of 52.9.

Meanwhile, the final eurozone services business activity index came in at 52.2, a touch higher than the flash estimate of 52.1 but down from 52.8 in August.

In terms of sectors, output rose at manufacturers and service providers. The rate of expansion in manufacturing production ticked higher and remained above that for service sector business activity for the fourth straight month. Services output growth dipped to a 21-month low.

Of the ‘big four’ nations, France was the only one to signal an accelerated increase in economic output, which took its pace of expansion to a 15-month high. By contrast, growth in Germany slowed to a 16-month low.

Markit’s chief business economist, Chris Williamson, said: “While the PMI surveys suggest the eurozone economy continued to grow at a 0.3% rate in the third quarter, there are signs that momentum is waning. September’s expansion was the smallest since the start of last year.

“The slowing rate of growth across the region in part reflects growing caution among businesses in terms of their spending due to worries about the economic outlook, linked in many cases to political uncertainty. We see this trend persisting into next year, as the impact of Brexit is exacerbated by uncertainty surrounding elections in France and Germany alongside ongoing political unrest in Italy and Spain.”

Pantheon Macroeconomics said: “Overall, these data continue to suggest that services activity in the eurozone is weakening slightly, but growth remains positive.”