Eurozone business grew at slowest rate in August

Eurozone business grew at the slowest rate this year in August and retail sales declined in July, surveys showed on Wednesday.

In its monthly survey, the closely watched financial information company Markit highlighted escalating tension between Russia and Ukraine as the main factor in declining business activity across the 18-country Eurozone.

Its purchasing managers’ index, which gathers and assesses figures from the manufacturing and services sectors, fell to 52.5 points in August from July’s 3-month high of 53.8. Although it remains above the 50-point threshold that signals growth, the indicator is at its lowest level this year and below the preliminary estimate of 52.8.

Also Wednesday, the European Union’s statistics office, Eurostat, said Eurozone retail sales fell by a monthly rate of 0.4 percent in July. In the second quarter, the Eurozone economy posted flat growth, raising fears of an unprecedented triple-dip recession.

The European markets reacted positively Wednesday to news of a cease-fire agreement by Ukraine President Petro Poroshenko and Russian President Vladimir Putin.

Although there was no immediate indication that the fighting would stop, the Stoxx 50 index of leading European shares was up 0.9 percent, Germany’s DAX 1.1 percent, and unsurprisingly, Russia’s RTS index was trading 3.9 percent higher.


(Photo: Ossi Kallunki/