The activity in Eurozone’s dominant service industry retreated to the contractionary territory as some governments reimposed restrictions due to resurging coronavirus infections. The composite reading of the latest Purchasing Managers’ Index fell from 51.9 in August to 50.4 in September, just above the 50-point threshold separating expansion and contraction.
The PMI of the service industry, which accounts for two-thirds of the bloc’s economy, retreated from 50.5 to 48.0 over the same period. According to the survey demand for service fell in September, with firms cutting jobs for a seventh consecutive month. The new business index dropped from 49.8 to 48.1. On the other hand, optimism improved, with composite future output index increasing from 57.8 to a seven-month high of 60.5.
Analysts warned that the faltering economy in September renewed risks of another downturn in the fourth quarter. According to them, the recovery will depend on how the new infection wave can be put under control and whether restrictions can be relaxed to allow service sector activity to resume.
