Eurozone Service Sector Growth Hits Twelve Month Low

06 October 2004

The Eurozone – the eight largest European economies (Austria, France, Germany, Greece, Ireland, Italy, Netherlands and Spain) within the twelve nation euro currency area – witnessed robust service sector growth in September, nevertheless slowing to a thirteen-month low.

The Reuters Eurozone Composite Output Index, which measures the output of the combined manufacturing and service sectors, recorded 53.9 – remaining above the 50.0 'no-change' mark for the fourteenth consecutive month. But the rate of growth slowed from 55.0 in August to its lowest level since September 2003.

Overall, the seasonally adjusted key findings were …

  • New Orders
    The Composite New Orders Index fell from 54.5 in August to 53.1 – its lowest reading since September 2003 – to indicate that the rate of growth of new business had again moderated.

  • Input prices
    The Composite Input Prices Index registered 63.5, to indicate a further sharp rise in average prices paid for inputs. Furthermore, an increase in the index from 62.6 in August signaled that the rate of inflation gathered pace from the previous month and was the highest since June.

  • Employment
    The Composite Employment Index rose from 49.8 in August, to 50.2 in September. Moreover, at a level above the critical 50.0 no-change mark, the Index signalled a marginal expansion of the Eurozone private sector workforce for the first time in three years.

    The Purchasing Managers' Indexes are designed to provide the earliest indication of business conditions in the Eurozone, the data being currently based on surveys carried out in Germany, France, Spain, Italy, Austria, Ireland, Greece and the Netherlands (plus the UK, Poland and the Czech Republic for the EU data). The index covers over 6,000 manufacturing and services companies.

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    Data sourced from NTC Research; additional content by WARC staff