Euro zone business activity fell for the first time in seven months in September, a major survey showed, as France lost steam after the Paris Olympics.
The S&P Global Purchasing Managers’ Index (PMI), a key gauge of the overall health of the economy, fell to 48.9 in September from 51 in August.
A reading below 50 indicates shrinkage.
“The euro zone is heading towards stagnation. After a temporary lift in France, the euro zone’s main economy, due to the Olympics effect, the composite PMI fell by its biggest in 15 months in September,” said Cyrus de la Rubia, chief economist at Hamburg Merkbank.
“Given the sharp declines in new orders and backlogs, it doesn’t take much imagination to predict a further weakening of the economy.”
The study showed that the euro zone’s two largest economies, Germany and France, were the main drivers of the recession in the 20-nation single currency bloc.
The Olympics are just a “temporary thing”
French private sector production began to shrink again after the Olympic boost, while German business activity fell the most since February.
“France’s growth prospects are looking worse with France’s new minority government planning to significantly tighten fiscal policy,” he said.
Eurozone PMI data showed manufacturing fell across the board, marking its 18th consecutive month of decline.
Messy manufacturing
(Photo provided by AFP)
Read more at RFI English
Read also:
Europe needs ‘unprecedented’ investment to close gap with China, US
Public auditor warns France’s finances are in ‘alarming state’
France asks EU for more time before submitting crucial budget deficit plan
