Output in the Eurozone drops even further

Ben Southwood
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THE EUROZONE came in for even more pain in October, according to a prominent business survey out yesterday.

But it was Germany that dragged the bloc down this month – outweighing slight improvements in Italian, French and Spanish indices. The composite Eurozone purchasing managers’ index (PMI) sagged to 45.7 in October, Markit said yesterday, from 46.1 in September, and slightly under the early estimate of 45.8.

Though all were still contracting faster than Germany, the pace of decline slowed in Italy, France and Spain. Italy hit a seven-month high of 45.6 on the index, France edged its index up from 43.2 to 43.5, and Spain’s index inched up to 41.5 – but all are well below the crucial no-change value of 50.

But it was the big drop in the German index, from 49.2 in September to 47.7 in October, that dragged the overall index down.

“Signs that the contraction in Germany gathered pace are particularly disappointing,” said Markit’s Rob Dobson, “given the important role a strong performing Germany could play in stimulating growth elsewhere in the currency zone.

“Sentiment is still being hit hard as companies worry about the impact of weak domestic demand and a slowing global economy,” he added. The only positive nugget was Ireland, which hit a 20-month high of 55.5 on the index.