Further signs the economic recovery in the Eurozone is stuttering
BUSINESS activity in the Eurozone rose last month at its slowest pace so far this year, in a further worrying sign that the recovery is faltering in the 18-member bloc.
New orders rose just fractionally, with the rate of increase waning for the third successive month.
And employment was largely unchanged once again as companies held back from hiring staff because of weak sales growth, according to the flash Purchasing Managers Index for September.
While PMIs in Ireland are recording multi-year highs and economic growth here is forecast to rise as high as 5pc this year, the recovery across the currency bloc as a whole has been struggling to take hold.
In the services sector, growth of activity slowed to a three month low, while manufacturing fared worse, falling back to a level not seen since July of last year.
Chris Williamson, economist with financial information firm Markit, which compiles the data, said the survey paints a picture of ongoing malaise.
"Concerns about the Ukraine crisis, related Russian sanctions and worries about the single currency area's general economic plight appear to be having an increased impact on the Eurozone economy," he said.
"The danger is that the European Central Bank's efforts to stimulate the economy will prove ineffective in the face of such headwinds, which are exacerbating already-weak demand."
Although the PMI reading remains above the crucial 50 mark, it has slipped to 52.3, the lowest level since December of last year.
At 52.9, the average quarterly reading was also the slowest this year.
Anything above 50 signals expansion, while below that means contraction. PMIs are regarded as reliable forward- looking indicators of the health of an economy and are therefore closely watched by experts.
Faster growth in Germany, led by the services sector, was off-set by an ongoing downturn in the bloc's second biggest economy and slowing of growth elsewhere in the region.
Growth picked up slightly in Germany from the 10-month low seen in August, but a faster pace of expansion in the service sector was countered by growth almost grinding to a halt in factories.
France continued to contract. The service sector there fell for the first time in three months, but the manufacturing PMI, although still in decline, rose to a four month high. Mr Williamson said the ECB will likely be disappointed by the flash data.
"The survey data suggest GDP is on course to grow by 0.3pc at best in the third quarter, buoyed by a 0.4pc expansion in Germany but dragged down by stagnation in France and sluggish growth in the rest of the region," he said.
"There are also worrying signs that growth could slow further in the fourth quarter."
On the other side of the world, the HSBC flash PMI for China recorded a two-month high, at 50.5