Eurozone growth slower than expected

Growth in the eurozone’s service and manufacturing sectors slowed more than forecast in September, according to a survey, indicating that the region’s economy recovery is losing momentum.

Markit’s Eurozone Flash Services Purchasing Managers’ Index — a closely-watched survey of purchasing managers — compiled from surveys of around 2,000 businesses, ranging from banks to restaurants, fell to 53.6 in September from 55.9 in August, its lowest reading since February.

“September’s plunge in the euro zone PMI provides the strongest signs yet that the euro zone recovery is rapidly losing momentum,” Reuters quoted Ben May at Capital Economics as saying.

He says the figures point to a slower 0.4 percent growth pace in the third quarter.

According to a Reuters poll, economic growth in the eurozone is expected to slow to a crawl over coming quarters as a result of austerity packages introduced by European countries.

However the chances of the bloc slipping back into recession remain slim.