Ekonomické zprávy
04.11.2021

Eurozone growth slows to six-month low in October

According to the report from IHS Markit, the slowdown in euro area growth continued at the start of the fourth quarter as expansions in the manufacturing and service sectors cooled. Growth at goods producers slowed to a particularly notable degree, easing to the weakest since the recovery in manufacturing began last July. Meanwhile, activity growth hit a six-month low at service providers as strong post-lockdown rates of expansion petered out. Supply-side constraints were a major headwind to businesses in October and also fuelled strong inflationary pressures, with both input costs and output prices rising at record rates.

After accounting for seasonal factors, the Eurozone PMI Composite Output Index fell to 54.2 in October, from 56.2 in September and its lowest reading for six months. Furthermore, the latest data represented a third successive slowdown in growth across the euro area and marked a further easing from July’s 15-year high.

The service sector continued to be the primary driver of economic growth at the start of the fourth quarter, despite the expansion weakening. Meanwhile, material shortages and supply bottlenecks squeezed production at manufacturers, particularly in the autos sector.

The Eurozone PMI Services Business Activity Index fell to a six-month low of 54.6 in October, from 56.4 in September. The headline services figure has now shed over five points since July’s 15-year zenith as business activity across the euro area gets closer to pre-pandemic levels.

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