| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : EU Economy Last Updated: Oct 6, 2010 - 12:01:48 PM

Slowest expansion of Eurozone services for 6 months; Dips in Spain and Ireland; Robust growth in France and Germany
By Finfacts Team
Oct 5, 2010 - 9:04:53 AM

Email this article
 Printer friendly page
Source: Markit

The final Markit Eurozone Services Business Activity Index fell to a six-month low of 54.1 in September, down from 55.9 in August but above the earlier flash estimate of 53.6. Business activity has now risen in each of the past 13 months. The slowdown was broad-based by nation, with PMI (Purchasing Managers' Index) activity indexes falling in each of the countries covered by the survey and contractions in Spain and Ireland. However, wide national disparities remained firmly evident, with recovery dependent upon France and Germany.

France recorded by far the fastest expansion of business activity in September, despite the rate of increase slowing to a six-month low, followed by Germany, although growth here eased sharply to its weakest since June. Italy saw only a modest increase in activity, while Ireland rejoined Spain (which had posted a decline during August) in contraction territory.

New business rose for the thirteenth month running in September. Although the rate of expansion slipped to a three-month low, it was in line with the post-recession average. France and Germany saw the fastest expansions in new work – with France outpacing the other nations by some distance – but both saw slower growth than in August. Italy posted a slight rise in new business and was the only nation to see faster growth. In contrast, new work in Spain declined at the sharpest rate so far in 2010 and Ireland saw renewed contraction.

Capacity and employment

Service sector employment increased for the fifth successive month, although the rate of job creation was only slight. Moreover, growth was limited to France and Germany, whose rates of job creation remained close to post-recession peaks. Employment was cut in Italy, Spain and Ireland. Spain saw staffing levels fall at the fastest pace since January, while Italian service providers cut jobs following a slight increase in August. Meanwhile, the pace of reduction in Ireland slowed to the joint-weakest in the current 31-month period of decline.


Confidence regarding levels of business activity in one year’s time rose to a five-month high in September, and was further above the long-run average seen prior to the financial crisis. The improvement in confidence was mainly centred on France and Italy, where optimism hit 80- and five-month highs respectively. Optimism fell in Germany (although, like France and Italy, remained above its pre-recession long-run average), as well as in Spain and Ireland (dropping well below long-run averages).


Average costs rose for the tenth consecutive month in September, reflecting higher purchase prices and increased staff costs. The rate of inflation was slower than in August and below the earlier flash estimate, but still above the post-recession average. Costs rose in France, Germany, Italy and Spain, whereas Ireland reported a further decline. However, only Germany saw faster cost inflation than in the previous month.

Strong competition prevented Eurozone service providers from passing on higher costs to their clients. Average charges were lowered for the twenty-third month running and, although still only modest, the rate of reduction was faster than in the previous month. Only Germany reported an increase in output prices, while Ireland and Spain saw the steepest rates of decline.

Chris Williamson, chief economist at Markit said: "The Eurozone service sector recovery showed further signs of waning in September, but reassurance can be gained from the fact that the overall rate of expansion remained robust by historical standards. Whereas the survey was consistent with private sector services expanding at a quarterly rate approaching 1% earlier in the year, this looks to have slowed to around 0.6%-0.7%, a rate in line with the long-run average seen prior to the financial crisis.

"However, with Ireland and Spain now both reporting falling activity levels, and growth all but stalled in Italy, the recovery is looking increasingly lop-sided and all-too dependent on France and Germany.

"Although business confidence picked up to a five-month high, this was not accompanied by an increase in job creation, which remains particularly disappointing as job losses in Italy, Spain and Ireland offset improvements in France and Germany. The failure to generate jobs is likely to hinder growth of consumer spending in coming months."

The Eurozone Services PMI (Purchasing Managers' Index) is produced by Markit and is based on original survey data collected from a representative panel of around 2000 private service sector firms. National data are included for Germany, France, Italy, Spain and the Republic of Ireland.

Related Articles
Related Articles

© Copyright 2010 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Spain's strong recovery to slow in the next few years
Italy's Mezzogiorno is Achilles' heel of Euro Area - lowest birth rate since 1862
Euro Area GDP grows at weak 0.3% in Q2 2015
German GDP up 0.4% in Q2 2015; France's GDP stagnates
Germany's Surplus: Lots of critics; Credible solutions scarce
Euro Area industrial production dips in June and May after a flat April
Greece faces two years of recession according to EU officials
High EU youth unemployment rate not as bad as it seems
Eurozone retail PMI surges to highest since January 2011
ECB monetary policy still tight for Southern Europe
German exports fell in June — surplus at record; Exports up 13.7% year-on-year
Eurozone manufacturing sector continued to expand in July
Weak euro unlikely to have significant impact on Euro Area growth
Is Euro Area Ireland's top trading partner?: EU28 is overwhelmingly UK's
German car firms boost exports from Spain, UK, Portugal, Czech Republic, Slovakia, Hungary and Romania
Flash Eurozone manufacturing/ services PMI close to four-year high despite Greek crisis
Krugman calls euro a Roach Motel; Hotel California gets 1-star grade
Greece & Euro Crisis: July 2015 articles from Finfacts
Greece and other poor countries in Euro Area will not become rich
Euro Area manufacturing/ services PMI hits four-year high in June
Western European car market: Recovery continues
Greece could become a failed state like Venezuela
Multinational companies pay on average 30% less tax than domestic competitors in EU
EU's list of 30 tax havens omits the biggest 4 in Europe
China to invest in Juncker's European investment fund
Greek talks collapse; Game theorists gambling with future — Germany's vice-chancellor
German exports and industrial production in strong rises in April
Tackling Inequality: Scandinavian countries have the most successful welfare systems in Europe
Eurozone unemployment fell by 130,000 in April 2015 — down 849,000 in 12 months
Eurozone service sector business activity slowed during May
German 2015 GDP forecast cut; Jobless level at 24-year low
Eurozone manufacturing in modest acceleration in May
FDI into Europe at record in 2014; UK on top: Germany location for future investment
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015