Eurozone services sector grows for 8th straight month

The HCOB Eurozone Services PMI Business Activity Index signalled continued growth in the services sector at the end of the third quarter, marking the eighth consecutive month above the neutral threshold of 50.0.

However, the index fell to 51.4 in September from 52.9 in August, reflecting a modest expansion that is the weakest in seven months.

This growth occurred despite a slight decrease in incoming new work, marking the first decline in demand since February. Backlogs of work decreased for the fourteenth time in the past 15 months, suggesting that firms are managing outstanding orders effectively.

Employment levels in the service sector continued to rise, albeit at a slower pace than in previous months, remaining below historical averages since data collection began in July 1998.

Additionally, inflation pressures eased, with rates of increase in input costs and output prices reaching their lowest levels in 42 and 41 months, respectively.

Despite the modest contraction in demand, expectations for growth over the next 12 months improved in September, marking the first increase in business confidence since May. However, overall optimism remains subdued by historical standards.