Eurozone Economic Recovery Lost Momentum in August

A survey showed that the recovery of the Eurozone economy from its biggest downturn on record faltered in August as growth in the services sector dominating the bloc almost completely halted, suggesting that the long road to recovery is bumpy.

Last quarter, the bloc’s economy shrank 12.1%, as the imposition of general isolation measures aimed at preventing the spread of the Coronavirus led to the closure of companies and citizens stay at home.

A Reuters poll last month expects a rebound in the current quarter with growth of 8.1%, but says a full recovery will take two years or more. But the final reading of the IHS Market Purchasing Managers’ Index, which is considered a good gauge of the economy’s resilience, indicates that the economy is still faltering.

The index fell to 51.9 last month from 54.9 in July, near the 50 level separating growth and contraction, although it is slightly better than an initial reading of 51.6. The Services PMI declined to 50.5 from 54.7, but was better than the initial reading of 50.1.