Eurozone economies struggle in third quarter
03/10/2014
Companies in the Eurozone have continued to struggle throughout the third quarter of 2014, with the French economy performing particularly badly.
Figures showed growth in the Eurozone economy has continued to slow down in recent months.
The Purchasing Managers Index (PMI) for the Eurozone fell to 52 in September, down from 52.5 the previous month, suggesting that the pace of growth in the private sector fell.
The PMI is an index which is used by analysts to measure growth in the private sector of an economy, with a score of 50 or higher indicating growth.
The data for the PMI is collected through monthly surveys of private organisations, which are adjudged to be representative of the economy they operate within.
Whilst the PMI for the Eurozone still remains above 50, analysts had only expected it to drop to 52.3.
The larger than expected drop has suggested that the Eurozone has slumped even further than expected.
Additionally, some important sectors within specific economies performed even worse. One of these was the French services sector, which recorded a PMI of 48.4, down from 50.3 in the previous month.
Stuck in a rut
It was revealed that Italy was one of the worst performers in the Eurozone, and that their economy is expected to shrink as a whole in the third quarter.
Tomo del Carpio of RBC Capital Markets said: “Italian PMI surveys provided little by way of positive take-aways this month”.
Mr del Carpio also claimed that “a modest contraction is on the cards in the third quarter” for Italy.
However, there was one positive for the Eurozone, as retail sales growth performed 12 times better than analysts had predicted.
Retail sales grew by 1.2% overall, with food, drink and tobacco sales increasing by 0.6%, and non-food sales increasing by 1.5%.
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