Eurozone growth slows in September

Economic growth in the eurozone stumbled in September, a closely watched survey said, as supply chain bottlenecks, high prices and the spread of the coronavirus Delta variant hurt output.

“Eurozone business activity grew at a markedly reduced rate in September, reflecting the peaking of demand in the second quarter, supply chain bottlenecks and concerns over the ongoing pandemic,” IHS Markit said.

The purchasing managers’ index (PMI), which measures corporate confidence, slipped to a still strong 56.1 in September, after posting 59 points in August. A figure above 50 indicates growth.

IHS Markit said the increase in activity was the slowest since April, when pandemic-linked closures still weighed heavily on Europe, but remained well above the pre-Covid longer-term average.

“For now, the overall rate of expansion remains solid, despite slowing, but growth looks likely to weaken further in coming months if the price and supply headwinds show no signs of abating,” said Chris Williamson, chief economist at IHS Markit.

This would be true, he added, “Especially if accompanied by any rise in virus cases as we head into the autumn”.

He warned that European firms were feeling the supply pinch and have become “increasingly frustrated”, with companies expressing worry of losing customers.