Eurozone business growth slows as Asia weakens

Eurozone business growth slowed this month as Asian demand weakened, leading to fewer new jobs and forcing factories to reduce output, even though companies raised prices for the first time in over four years, a survey showed yesterday.

The slowdown came amid debate on whether the ECB should expand its stimulus programme to have more impact on inflation and growth.

Markit’s Composite Flash Purchasing Managers’ Index, based on surveys of thousands of companies and considered a good guide to growth, came in at 53.9 in September, down from 54.3 last month.

A Reuters poll had predicted a dip to 54.1. The headline index has been above the 50 level that separates growth from contraction since mid-2013.

“Exports are under pressure from Asia and that has lowered overall demand,” said Chris Williamson at Markit.

Fears of China’s economy cooling rapidly, coupled with authorities there devaluing the currency, spooked financial markets last month.

Stocks and commodities both fell. Mr Williamson said the PMI pointed to third-quarter eurozone GDP growth of 0.4%, similar to the consensus from a Reuters poll of economists earlier this month.

“This isn’t runaway growth by any means,” he said.