Economic Gloom in the Eurozone Spreads

In October, Markit's Composite Purchasing Managers' Index (PMI) fell to 45.8 from a September reading of 46.1. That is, businesses in the eurozone saw their worst month since the 17-nation bloc emerged from recession more than three years ago.

The index, which surveys around 5,000 businesses across the eurozone and is viewed as a reliable growth indicator, now has been below the 50 mark that separates growth from contraction since February.

The PMI for the services sector ticked up from last month's 46.1 to 46.2, but that missed expectations for a larger rise to 46.4. The manufacturing PMI slipped to 45.3 from 46.1, rather than the predicted a climb to 46.5.

The business expectations index fell sharply to 47.8, its lowest reading since February 2009. And the output index for the sector sank to 44.8 from last month's 45.9.

In addition, the composite employment index rose to 47.1 from last month's 46.4, as businesses cut their workforces for the 10th straight month.

"There is nothing specific that is making businesses gloomier - it is a much more general widespread gloom," said Chris Williamson, chief economist at Markit. "Businesses are very much in cost-cutting, retrenchment mode, battening down the hatches because they don't know what the outlook is."

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