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EUROZONE businesses are reporting a sharp slowdown in activity caused by an aggravating global supply squeeze that is also producing record inflation.

French manufacturing output declined at the steepest pace since stringent coronavirus lockdowns were in place last year, while growth momentum deteriorated sharply in Germany, purchasing managers report.

Private-sector activity in the eurozone slowed to the weakest since April, though it remained above a pre-pandemic average.

“The ongoing pandemic means supply-chain delays remain a major concern, constraining production and driving prices ever higher, both in the manufacturing and services sectors,” said Chris Williamson, chief business economist at IHS Markit, which compiles the survey.

“After strong second and third-quarter expansions, GDP growth is looking much weaker by comparison in the fourth quarter.”

The report comes less than a week before European Central Bank officials gather to assess the state of the eurozone economy and highlights the challenge posed by the rebound from months of pandemic shutdowns. — Bloomberg



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