Euro zone growth slows as Chinese factories trundle on

Tue Sep 23, 2014 11:07am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jonathan Cable and Jake Spring

LONDON/BEIJING (Reuters) - Euro zone business growth dipped to a 2014 low in September as firms again cut prices, while factory activity in China picked up only slightly, surveys showed, keeping the spotlight on policymakers' plans for economic stimulus.

The data seems sure to dishearten the European Central Bank, struggling to spur growth and revive disconcertingly low inflation and whose head Mario Draghi again raised prospects on Monday of using extra unconventional measures if needed.

In China, signs of a weakening labor market reinforced expectations that authorities in Beijing would further relax financing conditions in coming weeks.

"The Chinese number beat expectations but it's not really going anywhere," said Peter Dixon, senior economist at Commerzbank. "It's indicative of an economy that doesn't have a lot of momentum behind it. It's doing okay but we would be looking for a bit more strength."

The HSBC/Markit Flash China PMI rose to 50.5 in September from August's final reading of 50.2. Economists polled by Reuters had expected factory growth to stall at 50.0, citing deteriorating business confidence and the growing drag from the cooling property market.

Markit's Eurozone Composite Flash Purchasing Managers' Index, based on surveys of thousands of companies across the region and seen as a good indicator of growth, dipped to a nine-month low of 52.3, shy of expectations in a Reuters poll for no change from August's 52.5.

INFLATION OUTLOOK POOR   Continued...

 
Workers look at machines moving newly made raw bricks at a factory in Huaibei, Anhui province July 31, 2014. REUTERS/China Daily