Financial Schools Reviews

() - The eurozone’s private sector growth decelerated slightly in August as both manufacturing and services activity slowed, figures showed on Monday. Worryingly, growth in the euro area’s private sector continued to be dependent upon the region’s two biggest economies, France and Germany, suggesting increasing divergence in the region’s two-speed recovery.

The Markit eurozone composite purchasing managers’ index, an indicator of health at 4,500 companies across the region, fell to 56.1 from 56.7 in July. A reading above 50 indicates expansion while one below suggests contraction. Economists had forecast a score of 56.3.

The decrease was mainly due to a fall in the manufacturing PMI, which fell to 55.0 from 56.7, a six-month low. Economists were looking for a score of 56.2.

At the same time, the services PMI slid to 55.6 from 55.8, a two-month low. Economists had forecast a score of 55.5.

Markit economist Chris Williamson said the strong headline numbers masked a few worrying developments in the region. “Of greatest concern, the upturn continued to be all-too dependent upon France and Germany,” he said.

“Growth in the rest of the euro area slowed to near stagnation, and services even contracted again as austerity measures bite. There is little evidence here to suggest that buoyant business conditions in the region’s core nations are spilling over to the benefit of the periphery, meaning an increasing divergence in the euro area’s two-speed recovery.”

Germany’s composite purchasing managers’ index rose to 59.3 from 59.0 in July. The manufacturing PMI slid to 58.2 from 61.2, a six-month low, while the services PMIrose to 58.5 from 56.5, a three-year high.

Meanwhile, France’s composite purchasing managers’ index fell to 59.0 from 59.7 in July, a five-month low. The manufacturing PMI climbed to 54.7 from 53.9, while the services PMI dropped to 59.9 from 61.1.

Eurozone manufacturers and service providers both reported increases in output during August, with manufacturing again leading the way. New orders continued to rise in August, albeit at a slower pace than in the previous month.

Manufacturers reported the faster increase in new orders, despite growth easing to the slowest of the year so far. Service providers saw a slight pick up in the rate of increase in new business.

Euro area private sector employment rose for the fourth consecutive month in August. Although the rate of job creation remained modest, it was only slightly weaker than July’s 27-month high. Employment continued to rise in both the manufacturing and service sectors, although at a slower pace.

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