Investing.com – The euro zone's services sector grew less than initially projected in September, falling to the lowest level since July 2009, data showed on Wednesday.
In a report, the market research group, Markit said the final euro zone services business activity index fell to 48.8 in September, down from a preliminary estimate of 49.1.
Analysts had expected the index to remain unchanged from a preliminary estimate of 49.1.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
The contraction was led by Spain and Italy, where the rates of contraction both accelerated to the fastest in over two years. Germany also contracted, albeit only marginally, for the first time since July 2009.
Meanwhile, growth slowed to only a modest pace in France, the weakest since the services recovery began two years ago.
Business confidence hit a 29-month low in Germany, a 33-month low in Italy and a 29-month low in France. An 11-month low was seen in Spain.
Commenting on the report, Chris Williamson, chief economist at Markit said, “Activity fell most sharply in Italy and Spain, where austerity measures have combined with worries about the outlook, hitting domestic demand.”
“Moreover, the malaise is spreading to the core, where surging rates of expansion earlier in the year have turned rapidly into contraction in Germany and only very modest growth in France,” he added.
Following the release of the data, the euro was down against the U.S. dollar, with EUR/USD shedding 0.33% to trade at 1.3306.
Meanwhile, European stock markets were up sharply after the open. The EURO STOXX 50 jumped 1.6%, France’s CAC 40 rose 1.8%, the FTSE 100 climbed 1.55%, while Germany's DAX gained 1.2%.
In a report, the market research group, Markit said the final euro zone services business activity index fell to 48.8 in September, down from a preliminary estimate of 49.1.
Analysts had expected the index to remain unchanged from a preliminary estimate of 49.1.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
The contraction was led by Spain and Italy, where the rates of contraction both accelerated to the fastest in over two years. Germany also contracted, albeit only marginally, for the first time since July 2009.
Meanwhile, growth slowed to only a modest pace in France, the weakest since the services recovery began two years ago.
Business confidence hit a 29-month low in Germany, a 33-month low in Italy and a 29-month low in France. An 11-month low was seen in Spain.
Commenting on the report, Chris Williamson, chief economist at Markit said, “Activity fell most sharply in Italy and Spain, where austerity measures have combined with worries about the outlook, hitting domestic demand.”
“Moreover, the malaise is spreading to the core, where surging rates of expansion earlier in the year have turned rapidly into contraction in Germany and only very modest growth in France,” he added.
Following the release of the data, the euro was down against the U.S. dollar, with EUR/USD shedding 0.33% to trade at 1.3306.
Meanwhile, European stock markets were up sharply after the open. The EURO STOXX 50 jumped 1.6%, France’s CAC 40 rose 1.8%, the FTSE 100 climbed 1.55%, while Germany's DAX gained 1.2%.