Eurozone business activity saw its first decline in seven months in September, primarily driven by a slowdown in France following the conclusion of the Paris Olympic Games. According to S&P Global's purchasing managers' index (PMI), the index fell to 48.9, down from 51 in August, indicating contraction.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted that the eurozone is edging towards stagnation, with significant contributions to this downturn coming from Germany and France. The French private sector has returned to contraction, and Germany experienced its fastest drop in business activity since February.
With France's minority government planning to tighten fiscal policy, growth prospects in the country appear increasingly bleak. The manufacturing sector across the eurozone has now contracted for the eighteenth consecutive month.