Euro zone Markit’s composite PMI falls to 52.5 in August
Activity in the eurozone’s private sector slowed more sharply in August than expected amid declines in France and Italy, indicating that the currency area is unlikely to emerge soon from economic stagnation.
Data firm Markit’s monthly composite purchasing managers index—a measure of activity in the manufacturing and services sectors in the currency bloc—fell to 52.5 from 53.8 in July. The figure is the lowest level in 2014 to date, and lower than a preliminary estimate of 52.8.
As members of the European Central Bank’s governing council prepared to gather for their monthly policy meeting on Thursday, the survey of 5,000 manufacturers and service providers also found that businesses in the region continued to cut their prices.
Figures released by the European Union’s statistics agency showed retail sales fell 0.4% in July from June, a sign consumer spending remains weak, making it difficult for businesses to raise their prices and help bring a long period of very low inflation to an end.
The eurozone economy stagnated in the three months ending June 30 after slowing in the first quarter. The PMIs for July and August suggest growth is unlikely to accelerate in the third quarter, adding to pressure on the ECB to take measures to boost growth and inflation.
If the central bank’s governing council were to take action Thursday, that would set the ECB further apart from other major central banks such as the Federal Reserve, which is expected to tighten policy around the middle of next year, and the Bank of England, which is seen doing so sooner.
