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Firms cut prices at a faster rate last month,
underscoring the difficulty the European Central Bank is likely
to have in bringing persistently low inflation back up,
especially with weak demand for goods and services in a
stagnating economy.
Indeed, inflation is at a five-year low of just 0.3 percent and
the bloc's economy stagnated in the second quarter.
Markit's Composite Purchasing Managers' Index, which is based on
surveys of thousands of companies across the region and is seen
as a good gauge of growth, fell to a ten-month low of 52.0, well
below August's 52.5.
That final reading was also weaker than a preliminary estimate
of 52.3, although it was the 15th month above the 50 line that
denotes growth.
"The PMI suggests the euro zone economy remained stuck in a rut
in the third quarter," said Chris Williamson, chief economist at
Markit.
The composite output price PMI, which has been sub-50 since
April 2012, fell to a 14-month low of 48.5 from August's 48.9.
The new orders sub-index, which measures demand, eased last
month to the lowest in almost a year.
"The waning of growth signaled by the PMI will apply further
pressure on the ECB to broaden the scope of its planned asset
purchases, to not only buy riskier asset-backed securities but
to also start purchasing government debt," added Williamson.
The central bank has launched a series of policies to boost the
economy and inflation.
On Thursday, the central bank said it will buy bundles of loans
and other forms of secured debt from mid-month in an attempt to
kick start a languishing euro zone economy, despite misgivings
in Germany and elsewhere.
An overall PMI for the dominant service industry fell to 52.4
from 53.1 in August, below the preliminary estimate of 52.8.
(Editing by Toby Chopra)
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