Eurozone business growth stagnates as virus resurges

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Germany, the eurozone's biggest economy, continues to lead the recovery, though at a slower rate.

Eurozone economic activity stagnated in September as a summer recovery faltered because of a resurgence in the spread of the coronavirus, IHS Markit said on Wednesday, September 23.

The firm's closely watched Purchasing Managers' Index fell to 50.1 points from 51.9 points in August, just barely above the key 50-point level which indicates growth. "A two-speed economy is evident, with factories reporting that production growth was buoyed by rising demand" while the service sectors were hard hit, said Chris Williamson, chief economist at IHS Markit., the eurozone's biggest economy, continued to lead the recovery, though at a slower rate than previously.

Williamson saw encouragement"from a further improvement in companies’ expectations for the year ahead, but this optimism often rests on [COVID-19] infection rates falling, which remains far from guaranteed for the coming months." Jessica Hinds of Capital Economics warned that the data"suggest that the recovery is grinding to a halt, at least outside the German manufacturing sector."

 

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