- Chris Williamson, chief economist at Markit
Services sector in the Euro area continued to expand in October, but at a slower pace than a month earlier. The services PMI came in at 52.3, down from 52.4 registered in September. Nevertheless, the gauge remained above the 50-mark threshold, meaning activity growth in the sector. In the Europe's growth engine, Germany, services activity slowed, but remained in the expansion territory for the 17th consecutive month in October. The services PMI for Germany was down to 54.4 compared with 55.7 a month earlier, with service providers' confidence towards the business outlook being the lowest in 22 months. Business activity in Europe's second biggest economy, France, remained below the 50-point level, adding to evidence that weak economic performance persists into the final quarter of the year, raising the prospect of a subdued or even zero 2014 GDP growth. Nevertheless, the Italian services sector surprised to the upside, as the corresponding gauge swung into the green territory. Italy's services PMI increased to 50.8 in October, compared with 48.8 in the previous month.
Also, Markit said its final Composite PMI reading, considered to be a trustworthy indicator of growth, climbed modestly to 52.1 from September's lowest level in ten months of 52.0. A separate report showed retail sales in the Euro bloc dropped 1.3% in September following a 0.9% growth in August.
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