Euro zone business growth slows in August, prices fall: PMI

Thu Aug 21, 2014 4:17am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jonathan Cable

LONDON Aug 21 (Reuters) - Euro zone private business growth slowed more than expected this month, despite widespread price cutting, as manufacturing and service industry activity both dwindled, a survey showed on Thursday.

Euro zone economic growth ground to a halt in the second, quarter, dragged down by a shrinking economy in Germany and a stagnant France, even before any impact from sanctions imposed on and by Russia over Ukraine.

Markit's Composite Purchasing Managers' Index (PMI) will provide gloomy reading for the European Central Bank (ECB), suggesting its two biggest economies are struggling like smaller members.

Based on surveys of thousands of companies across the region and a good indicator of overall growth, the Composite Flash PMI fell to 52.8 from July's 53.8, far short of expectations in a Reuters poll for a modest dip to 53.4.

However, readings above 50 still indicate expansion. Markit said the data point to third-quarter economic growth of 0.3 percent, matching predictions from a Reuters poll last week.EUGDPQ

"We are not seeing a recovery taking real hold as yet. We are not seeing anything where we look at it and think 'yes, this is the point where the euro zone has come out of all its difficulties'," said Rob Dobson, senior economist at Markit.

The euro zone has also yet to feel the full effect of escalating tensions with Russia. Europe stung Moscow with economic sanctions, prompting a

tit-for-tat response from Russian President Vladimir Putin, over the Kremlin's support for rebels in eastern Ukraine.   Continued...

 
Robots connect side parts on an Audi A3 light weight construction chassis at the production line of the German car manufacturer's plant in the Bavarian city of Ingolstadt April 11, 2013. REUTERS/Michaela Rehle