According to the report from IHS Markit, the Eurozone PMI Composite Output Index improved during October, but remained close to the crucial 50.0 no-change mark. The index recorded 50.6, up from 50.1 in September and slightly better than the earlier flash reading of 50.2, but still signalling a rate of growth that was amongst the weakest seen in the past sixand-a-half years. There remained a divergence between the manufacturing and service sectors during October. Whereas manufacturing firms recorded a ninth successive month of declining production, service sector companies indicated further growth, albeit at the second-weakest rate since January. At the national level, by registering a second successive monthly deterioration in private sector output, Germany remained the only country inside contraction territory during October.

Overall growth of the euro area private sector occurred in spite of a second successive monthly decline in new work. Weakness was centred on the manufacturing economy, where another marked fall in new orders was recorded, whilst there was also a sharp reduction in foreign demand. Overall exports were down for a thirteenth successive month, with the rate of decline amongst the sharpest in the series history.

The Eurozone PMI Services Business Activity Index indicated a slightly faster rate of growth during October. However, at 52.2, compared to September’s 51.6, the index nonetheless posted the second-lowest reading since January. A marginal increase in new business volumes was signalled during October, with growth only slightly up on September’s eight-month low. Export trade remained especially weak, declining for a fourteenth successive month.