Brussels, Belgium (4E) – Euro area private sector activity declined at a faster than estimated pace in August, an indication that the common currency bloc is will not be able to emerge yet from a period of low or no growth anytime soon.
The August euro zone composite output purchasing managers’ index (PMI) by Markit fell to 52.5, compared with July’s 53.8. The figure was revised down from the initial reading of 52.8.
Growth in output declined in both the service and manufacturing sectors. At the same time, manufacturing production grew at the slowest pace in the current 14-month period that it has accelerated, while the rate of growth at service providers fell to its lowest since June.
Ireland and Spain led the growth in the euro zone, but Italy slid back into contraction while France contracted for the fourth consecutive month.
Markit’s chief economist Chris Williamson said in the report that the PMI result add to the view that in the absence of government steps to improve competitiveness and productivity, economic performance will remain weak even with European Central Bank (ECB) stimulus.