Investing.com – Euro zone private sector activity slowed in September, according to survey data released on Friday.
The composite output index, which measures the combined output of both the manufacturing and service sectors fell to 54.2 from 54.5, against expectations for 54.4.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction
The manufacturing PMI fell to 53.3 compared to expectations for 54.4 and from 54.6 a month earlier.
The preliminary reading of the IHS Markit services purchasing managers’ index came in at 54.7 this month from 54.4 in August.
Economists had forecast a reading of 54.4.
The report highlighted that euro zone business activity grew in September at the second-weakest rate since late-2016, as manufacturing growth was subdued by export orders stagnating for the first time in over five years.
“Trade wars, Brexit, waning global demand (notably in the auto industry), growing risk aversion, destocking and rising political uncertainty both within the Eurozone and further afield all fueled the slowdown in business activity,” IHS Markit chief economist Chris Williamson said.
Thanks to activity in the service sector, Williamson predicts that the euro area economy will grow 0.5% in the third quarter.
“However, with new orders and backlogs of work rising at much reduced rates compared to earlier in the year, export growth evaporating and future expectations remaining close to two-year lows, the risks to future growth appear tilted to the downside,” Williamson concluded.