Growth in the eurozone has slowed to its slowest pace in 16 months as new orders dip, survey company Markit said Thursday, raising pressure on policymakers to crank up measures to support the economy.
Markit’s flash reading of its composite purchasing managers’ index (PMI) for the eurozone in November came in at 51.4 points, down from 52.1 in October.
A reading above 50 indicates growth. Such surveys of businesses are the most current reading of economic activity, and are thus closely watched by markets and policymakers.
While manufacturing ticked up slightly, growth slowed in the service sector slowed to its weakest reading since last December, said Markit.
New orders fell marginally, but it was a first decline since July 2013, which Markit said suggests growth could slow further in December.
“A fall in the eurozone PMI to a 16-month low raises the risk of the region slipping back into a renewed downturn,” Markit Chief Economist Chris Williamson said in a statement.
He said the PMI points to economic growth of 0.1-0.2 percent in this quarter. The eurozone grew by an anaemic 0.2 percent in July through September.
“Policymakers will no doubt be disappointed that recent announcements and stimulus measures are showing no signs of reviving growth,” said Williamson.
“The deteriorating trend in the surveys will add to pressure for the ECB to do more to boost the economy without waiting to gauge the effectiveness of previously-announced initiatives,” he added.
The European Central Bank has launched new programmes to pump money into banks to step up lending and begun limited buying of assets to free of their balance sheets.
It has signalled it is ready to step up asset purchases if necessary, but so far has shied away from massive purchases of government bonds like the British, Japanese and US central banks due to sensitivities over subsidising government borrowing.
Markit said a key area of weakness remained France, where business activity fell for a seventh consecutive month, although the flash composite PMI ticked up to 48.4 from 48.2 in October, indicating the rate of contraction slowed.
Germany’s composite flash PMI for November dipped to 52.1 from 53.9 the previous month, a 16-month low, pointing to a slowdown in growth in the eurozone’s biggest economy.