Eurozone business activity gloomiest in 3 years

Private sector business activity in the eurozone showed an eighth monthly decline in September hitting its gloomiest patch in three years, survey results showed on Thursday. The closely-watched Purchasing Managers Index (PMI), a survey of 5,000 eurozone businesses compiled by Markit research firm, came in at 45.9 points, down from 46.3 in July. Any reading below 50 indicates contraction in activity. Taken together with previous months the data suggested "the worst quarter for three years," Chris Williamson, Markit chief economist said in a statement. He tipped a 0.6 per cent contraction in gross domestic product for the quarter, which would confirm a return to recession. "We had hoped that the news regarding the ECB's intervention to alleviate the debt crisis would have lifted business confidence, but instead sentiment appears to have taken a turn for the worse," Williamson said, referring to plans by the European Central Bank to buy bonds issued by struggling eurozone governments. He said the business outlook was "the most gloomy since early-2009," with the "gloom clearly reflected in headcounts falling at the fastest rate since January 2010 as companies seek to adjust to weaker demand". At the same time, the survey reported company costs rising -- mainly energy price-driven -- despite weak global demand bringing output prices down. Some good news came from an easing in the rate of contraction in Germany, though the rate of decline accelerated markedly in France," Williamson added of the detail. He said Germany was seeing new orders dry up in both manufacturing and services sectors.