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Business activity in the euro zone fell for the second month in a row in October due to weak demand, a high-profile survey showed on Thursday.
S&P Global's HCOB Flash Eurozone Purchasing Managers' Index (PMI) recorded a reading of 49.7, compared to 49.6 in September. A number above 50 indicates growth and a number below 50 indicates contraction.
“The eurozone is stuck in a bit of a rut,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “The ongoing manufacturing downturn has been more or less offset by a modest rise in the services sector.”
“For now, it is not clear whether we will see further deterioration or improvement in the near future,” he added.
The survey showed that the euro zone's two largest economies, Germany and France, are once again driving the 20-nation single currency bloc into decline.
The statistics add to hopes of further interest rate cuts in December, after the European Central Bank (ECB) has already accelerated the pace of rate cuts this year.
The Frankfurt-based ECB has cut borrowing costs three times since June as inflation has fallen below its 2% target.
With consumer prices subdued, the central bank is becoming more concerned about the eurozone's growth outlook, which looks sluggish.
The euro zone economy grew by just 0.2% in the second quarter of this year.
Raz/UB/RL
