Survey points to further slowdown in eurozone economic recovery

Further evidence emerged Tuesday to show that the 18-country eurozone economy is failing to find any renewed momentum despite a raft of stimulus measures from the European Central Bank.

In its monthly survey, financial information company Markit said its purchasing managers’ index for the Eurozone — a closely watched gauge of business activity — fell to a nine-month low of 52.3 in September from the previous month’s 52.5.

It blamed the crisis in Ukraine, the related tit-for-tat sanctions between the West and Russia, and a general sense of pessimism about the eurozone economy’s plight.

Though anything above 50 indicates expansion, that’s largely due to an improvement in Germany, Europe’s largest economy. Germany, according to Markit, appears to have recovered at least some of the ground it lost in the spring and early summer.

Elsewhere, the picture appears more downbeat, notably in France, the second-largest economy. The survey also suggested that growth across the eurozone may slow further in the fourth quarter as new manufacturing orders fell for the first time in 15 months.

“The survey paints a picture of ongoing malaise,” said Markit’s chief economist, Chris Williamson.

Williamson said the survey pointed to growth in the eurozone of around 0.3 per cent in the third quarter. Though that’s up on the flat reading in the second quarter, it suggests that hopes earlier in the year that the recovery from recession was becoming self-sustaining were overly optimistic. Germany was largely responsible for the stagnant second-quarter performance in the eurozone, as a mild winter saw construction brought forward to the first three months of the year.