Purchasing managers indexes (PMIs) gauge the activity of thousands of companies. Survey compiler Markit said The latest eurozone PMI reading from survey compiler Markit indicates that the eurozone economy is shrinking at a quarterly rate of around 0.5%.

Markit’s Eurozone Composite PMI declined in October to 45.7 from 46.1 in the previous month. That was a bit less than the flash reading of 45.8 two weeks ago. It also marks its ninth consecutive month below the 50 mark, which divides expansion from contraction.

Rob Dobson, Senior Economist at Markit said:

Sentiment is still being hit hard as companies worry about the dual impact of weak domestic demand and a slowing global economy. This is likely to hit growth in the coming months, especially at a time when cost-caution at manufacturers and service providers is filtering through to the wider economy through rising job losses, reduced purchasing and inventory depletion.

Spain, France and Italy all saw steep contractions in October, although the rates of decline in each eased slightly compared with September. Germany’s downturn was less severe overall, but still faster than that seen in the month before.

Dobson also said:

Signs that the contraction in Germany gathered pace are particularly disappointing, given the important role a strong performing Germany could play in stimulating growth elsewhere in the currency zone. Ireland was the only real brighter spot in October, with growth improving as it continues to make up lost ground.

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