Eurozone Services Sector Growth Grinds to Near-Standstill

05 September 2002

The Reuters Eurozone Service Sector Business Activity Index fell by 1.5 points in August – the largest fall since last October, dropping from a revised 52.3 in July to 50.8 in August and indicating the weakest monthly expansion since activity began to recover from last year’s downturn.

Key finding from the Index, produced for Reuters by NTC Research, are …

The Eurozone Composite Output Index fell from 52.8 in July to 51.5 in August. At a level above the no change mark of 50.0, the index signalled an expansion of output for the seventh consecutive month, but the drop in the index pointed to an easing in the rate of increase for the second month in a row to the weakest seen since February.

New Business
The Composite New Business Index signalled an increase in demand for goods and services for the seventh successive month in August. However, the index fell from 52.6 in July to 51.4, thereby indicating an easing in the rate of growth to the weakest since February.

The Composite Employment Index fell from 49.8 in July to 48.2 in August, registering a fall in private sector employment for the eleventh month running.

Cost Inflation
A moderation in input cost inflation was recorded in August, as the Composite Prices Index slipped from a seventeen-month high of 57.1 in July to 55.3. The rate of increase signalled was the weakest since March, but nevertheless still significant.

The data are currently based on the results of surveys carried out in Germany, France, Spain, Italy, Austria, Ireland, Greece and the Netherlands (plus the UK for European Union data), covering over 5,500 manufacturing and services companies. These countries together account for an estimated 92% of total Eurozone gross domestic product. Questions are asked about real events and are not opinion based.

Data sourced from: NTC Research; additional content by WARC staff