LONDON — With businesses fretting over political uncertainties, including the potential impact of Britain’s exit from the European Union, economic growth in the 19-country eurozone has lost some momentum, a closely watched survey found Wednesday.
Financial information company Markit said its purchasing managers’ index, a broad gauge of economic activity encompassing the manufacturing and services sectors, edged down to a 20-month low of 52.6 points in September from 52.9 the previous month.
As anything above 50 indicates expansion, IHS Markit said its index indicates the economy continues to grow, but at a quarterly rate of only 0.3 percent, a muted pace that’s unlikely to make much of a dent in the jobless count.
Of the eurozone’s four largest states, IHS Market found that only France is showing signs of gaining momentum, with growth trending lower in Germany, Italy and Spain. Italy, it added, is possibly the biggest source of concern with third quarter growth of 0.1 percent, while Spain, in spite of a slowdown in September, remains the standout performer among the big four.
The slowing rate of growth across the region in part reflects “growing caution” among businesses about the economic outlook, often due to political uncertainty, said Chris Williamson, IHS Markit’s chief economist.
“We see this trend persisting into next year, as the impact of Brexit is exacerbated by uncertainty surrounding elections in France and Germany alongside ongoing political unrest in Italy and Spain,” he added.
Separately, Eurostat, the EU’s statistics agency, found that retail sales across the eurozone dipped by 0.1 percent in August, further evidence that the region’s economy is struggling.
As a result, there is a growing expectation that the European Central Bank will have to boost its stimulus package later this year, not least because inflation in the region is unlikely to get to the target of just below 2 percent anytime soon.