Eurozone private sector growth slows to four-month low in October

what happened

The euro area private sector grew at its slowest pace in four months in October, according to S&P Global's flash purchasing managers' survey. The composite output index dropped to 51.9 from 53.1 in September, missing the forecast of 52.7. Both manufacturing, at 52.4, and services, at 51.7, expanded more slowly than a month earlier.

France was the main drag, as its private sector slipped back into contraction after a single month of growth in September. Germany also cooled, with its composite index at 52.8 against 53.8, though the reading still signalled solid expansion by historical standards. Input costs rose again across the bloc, and ING economist Bert Colijn said higher energy prices were adding pressure.

why it matters

The data reinforce concerns that the eurozone recovery is fragile and could shape expectations for the European Central Bank's rate path. For the euro and European equity indices, France's weakness and rising input costs are the key points to watch.

market impact

Euro and European stocks: weaker eurozone growth and rising costs add pressure on EUR/USD.

tags

instruments