Growth in business activity in the euro area slowed in September

The pace of business growth in the euro area slowed in September to be the weakest in five months. The new restrictions, which are supposed to slow down the spread of the delta variant of the new coronavirus, have had a negative effect on demand. In addition, supply chain problems have caused input prices to rise sharply, reaching their highest level in more than 20 years. The composite Purchasing Managers' Index (PMI), which includes both manufacturing and services, fell 56.1 points in September from 59 points in August, IHS Markit said in a quick estimate. Economists expected a drop to only 58.5 points. Nevertheless, the index remains well above the 50-point threshold, which separates the decrease in activity from its expansion. The September PMI clearly shows "an undesirable combination of a significant slowdown in economic growth and a sharp rise in prices," said IHS Chief Economist Markit Chris Williamson. "Growth is likely to slow even further in the coming months if prices and supply problems do not begin to subside, especially if this is accompanied by any increase in new coronavirus infections." The input cost index jumped to 70.5 points and reached its highest level in more than two decades. On the contrary, the index of production expectations fell to an eight-month low. The PMI for the services sector fell 56.3 points in September from 59 points in August, reaching its lowest level since May. Economists counted 58.5 points. The PMI for the manufacturing sector fell to 58.7 points from 61.4 points and is at its lowest level since February, with 60.3 points expected.