Eurozone business activity slows: PMI survey

BRUSSELS (AFP) - Eurozone business activity slowed in October, coming off a 27-month high in September to highlight concerns the economy is recovering only slowly from recession, a survey showed on Thursday.

The closely-watched Composite Purchasing Manager's Index (PMI) compiled by Markit Economics fell to 51.5 points in October from 52.2 in September.

Holding above the 50 points boom-bust line, the report suggests the 17-nation eurozone continued to expand at the start of the fourth quarter, having escaped a record 18-month recession in the third with growth of 0.3 percent.

The question however is whether the recovery is at risk as the global economy shows no signs of a decisive turn for the better and with authorities, especially in Washington, trying to judge when they can best ease back on the stimulus pump.

"The dip in the PMI ... is clearly disappointing but it would be unwise to read too much into one month's data," Markit chief economist Chris Williamson said in a statement.

At the same time, it "will remind policymakers that a sustainable upturn is by no means assured" and will confirm the European Central Bank's view that "the recovery is slow, uneven and fragile," Williamson said.

"Attention is likely to be focused on whether the region requires more policy action to boost the recovery rather than on the timing of any withdrawal of stimulus," he said.

Analysts also said the report was disappointing after the relief that greeted the third-quarter growth figures but cautioned against too much doom and gloom at this stage.

The economy is moving along, albeit slowly, but that is still a major improvement compared with the depths of the debt crisis.

The "slightly disappointing results ... are not enough to question the persistence of the recovery," said Marie Diron, senior economic adviser to the EY Eurozone Forecast.

However, the report "highlights the fact that in a slow growth environment, setbacks will happen," Ms Diron said, noting that the outcome could have been coloured by the US debt ceiling crisis earlier this month which shut down the US government.