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Euro area economic activity slows to six-year low

Euro area economic activity slows to six year low

Euro area business activity slowed in to the lowest level in nearly six years in September, dragged down by a sharp fall in the manufacturing sector, the preliminary Purchasing Managers’ Index (PMI) showed.

The euro-area Composite PMI, including manufacturing and services sectors, eased growth to 50.4 in September from 51.9 in August. That came below analysts’ anticipations of 52.2.

Germany’s economic activities led the fall with a contraction of 49.1 this month, worst since April 2013, from 51.7 in August.

“The details of the survey suggest the risks are tilted towards the economy contracting in coming months,” said Chris Williamson, economist at IHS Markit. 

The report suggest that the 19-nation region would growth 0.1 percent in the quarter through September and may deteriorate further in the coming months, amid trade tensions and Brexit uncertainty.

As of 08:48 GMT, the euro plunged to a low of $1.0966, the lowest in nearly two weeks, extending its drop for a second consecutive session.

The pressure will remain on ECB policymakers even after they decided to slash the deposit rate and announced new stimulus to spur the ailing economy.

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