The monthly Reuters Report on the Eurozone - the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) within the twelve nation euro currency area - charts the fifteenth consecutive month of private sector growth, albeit at a pace that has progressively slowed to its lowest point since September 2003.
The October report, prepared for Reuters by NTC Research, is based on data from panels in Germany, Italy, France, Spain and Ireland. Combined, these countries account for an estimated 83% of Eurozone private sector services output.
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These are the key seasonally adjusted findings, both for the manufacturing and service sectors in October 2004 …
The Composite New Business Index fell for the fourth consecutive month in October, to register the weakest monthly rise in demand for goods and services for fourteen months. The rate of growth of new business dropped for the third month running in manufacturing and for the fourth successive month in services.
These rose sharply in October, up for the second month in a row from 63.5 in September to 66.9, thereby indicating the strongest rate of input price inflation since October 2000.
The Index rose to 50.2 in October, signalling a marginal increase in staffing levels for the second successive month. Raised employment over the past two months contrasts with falling staffing levels over the prior three-year period.
The index stood at 53.5 in October, up slightly from 53.3 in September to indicate growth of activity levels for the sixteenth successive month. Moreover, having fallen over the previous two months to register a steady easing in the pace of growth, the rise in the index in October signalled the first improvement in the rate of expansion since May.
These fell for the third successive month to hit a seventeen-month nadir in October. Although remaining above the 50.0 no-change level to signal expectations of further growth over the coming year, the weakness of the index suggests a marked easing of business optimism compared to the start of the year.
The downturn in optimism in October largely reflected a dip in confidence to a sixteen-month low in Germany, where expectations of future growth remained well below those of the other big-four nations.
The service sector survey data cover around 2,000 companies, with the contribution from each company weighted according to company size to produce individual country indices. The data for each country are then combined using weights determined by national contribution of services output to total Eurozone services output.
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Data sourced from NTC Research; additional content by WARC staff