Eurozone Private Sector Growth Slows as France Contracts
Eurozone private-sector growth fell to a four-month low in October, driven primarily by a sharp contraction in French business activity.
Private-sector growth in the Eurozone slowed in October, with the Composite Purchasing Managers' Index falling to 51.9 from 53.1. This represents the lowest growth level in four months, as both manufacturing and services indices missed expectations due to dampened demand and the effects of high interest rates.
France acted as the primary driver of the regional slowdown. Its Composite PMI plunged to 48.4, signaling a return to contraction across both sectors. This decline occurred amid a backdrop of political uncertainty, strikes, and unrest, leading to business confidence levels not seen since 2012, excluding the pandemic period.
Germany remained in expansion, though its Composite PMI moderated to 52.8. While overall selling-price inflation slowed, manufacturing input costs rose at the fastest pace since May, fueled by increased energy, fuel, and transportation expenses.
These diverging trends of slowing growth and stubborn industrial cost pressures complicate the policy outlook for the European Central Bank as it determines the timing and scale of future interest rate hikes.
