Thursday October 2, 2014 Search
Weather | Athens
27o C
19o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Eurozone business recovery eases despite price cutting

By Jonathan Cable

An expected acceleration in eurozone business activity failed to materialize this month and firms cut prices again to drum up trade, which may further stoke fears of deflation in the currency bloc, surveys showed.

Still, the 18-member currency bloc's recovery appears fairly broad-based, with growth across private industry near 2-1/2 year highs.

"The big picture is one of a region that is recovering. It is not a spectacular recovery, but it is certainly moving in the right direction with a couple of exceptions - notably France," said Chris Williamson, Markit's chief economist.

"The periphery has pulled out of its recession and Germany is positively surging."

Markit's Composite Purchasing Managers' Index, which is based on surveys of thousands of companies and is seen as a good guide to growth, dipped to 52.7, just below January's 31-month high of 52.9.

That missed expectations in a Reuters poll for a rise to 53.1 but marked the eighth month the index has been above the 50 level that divides growth from contraction.

Williamson said the latest data point to 0.5 percent economic growth this quarter, stronger than the 0.3 percent predicted in a Reuters poll published last week.

Germany's composite PMI rose to a 32-month high of 56.1 but in neighboring France the index fell to 47.6, languishing below the break-even level for the third month.

A PMI covering the region's dominant service sector nudged up to 51.7 from January's 51.6, weaker than an expected rise to 51.9. The manufacturing PMI fell to 53.0 from 54.0, below all expectations in a Reuters poll of 37 economists.

The manufacturing output index, which feeds into the composite PMI, fell to 55.5 from January's 33-month high of 56.7.

Price fall

Worryingly for policymakers, the survey suggested inflation wasn't going up anytime soon - a composite prices charged index nudged higher to 49.4 from 49.2 but in holding firmly below 50 showed firms have cut prices every month for nearly two years.

"The weakness reflects countries which are struggling but some of that weakness reflects policies implemented by companies to increase competitiveness, to boost productivity and offer goods and services at a more attractive price - which is what everyone wanted," said Williamson.

Inflation dropped unexpectedly to just 0.7 percent across the eurozone in January, official data showed last month, well below the European Central Bank's 2 percent target ceiling.

Falling inflation has increased pressure on the ECB to consider fresh policy to counter deflation risks and support a fragile recovery that appears to be running out of steam.

But with few options available, having already slashed its main interest rate to near zero and given more than 1 trillion euros of cheap cash to banks for a three-year period, the ECB held policy steady when it met earlier this month.

But it wasn't all disappointing news.

Factories increased headcount for the second month and optimism about the future among services firms held steady at January's 30-month high. [Reuters]

ekathimerini.com , Thursday February 20, 2014 (11:12)  
Draghi says ECB will purchase assets for at least two years
Draghi says ready to do more to fight low inflation
ECB holds rates, shifting focus to new purchase plans
Moscovici in charge of budgets seen prompting EU deficits debate
Marble door discovered in Amphipoli reinforces theory of ancient Macedonian tomb
Pieces of a broken, two-piece, Thasian marble door discovered at the excavation site on Kasta Hill on Thursday were expected to reinforce the belief that the tomb was erected during the anci...
Six face prosecutor for bank robberies, terrorist activity
Six people detained in Athens and Thessaloniki on Wednesday in connection to bank robberies and possible terrorist activity faced a prosecutor on Thursday. The suspects, four Greek men, aged...
Inside News
SOCCER
Rosenberg confident after win over Olympiakos
Malmoe captain Markus Rosenberg scored twice in the Swedes' 2-0 win over Olympiakos on Wednesday and illustrated his confidence in the team after the game. Rosenberg capitalized on slack def...
SOCCER
Rosenberg punishes Olympiakoss errors at Malmoe
A disappointing Olympiakos got the worst possible result from its clash with Malmoe in Sweden for the Champions League, going down 2-0 on Wednesday due to its own defensive errors and attack...
Inside Sports
COMMENTARY
Theres money, still
The decision reached by Prime Minister Antonis Samaras and his deputy, Evangelos Venizelos, to seek a vote of confidence in Parliament on October 6, is a final attempt to restore order in th...
EDITORIAL
Confidence and corrections
The government must secure a vote of confidence in Parliament. Any other development would see the country enter very turbulent waters. Prime Minister Antonis Samaras and his cabinet must ag...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Draghi says ECB will purchase assets for at least two years
2. Draghi says ready to do more to fight low inflation
3. Marble door discovered in Amphipoli reinforces theory of ancient Macedonian tomb
4. Rosenberg confident after win over Olympiakos
5. ECB holds rates, shifting focus to new purchase plans
6. Six face prosecutor for bank robberies, terrorist activity
more news
Today
This Week
1. Doctors, medical employees strike over staff shortages, wages
2. Court to hear Kasidiriaris-Kanelli case
3. Air travel to run smoothly after air traffic controllers' weekend strike deemed illegal
4. European stocks decline as investors await ECB policy meeting
5. Pensioners stage rally in central Athens
6. Moscovici in charge of budgets seen prompting EU deficits debate
Today
This Week
1. Greece may opt for unusual president to avoid snap polls, Venizelos says
2. Woman allegedly buried alive by accident in northern Greece
3. Salaries in Greece continue to slide, dipping 1.4 pct in Q2
4. Should you bet with Kissinger on where the world is heading?
5. Cypriots divided by 1974 war seek Shariah hub
6. The shocking thought of euro-dollar parity
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.