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Eurozone economy into reverse in September

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(BRUSSELS) - Private sector economic activity across the eurozone hit reverse in September for the first time in more than two years, a closely watched survey showed on Thursday.

"Germany and France both saw growth rates deteriorate to near-stagnation in September, while the rest of the single currency area suffered the steepest contraction for over two years," he added.

"An increased rate of decline of incoming new business and falling confidence about the year ahead in the service sector raise the risk of further contraction in the coming months," said chief economist Chris Williamson of Markit.

The London-based researchers' Purchasing Managers Index (PMI) showed that eurozone growth slumped to 49.2 points in September against 50.7 points the previous month.

A reading below 50 points indicates contraction. The last time the indicator had recorded such a slide was in July 2009, Markit said.

The services sector logged 49.1 points, down from 51.5 in August, while manufacturing slipped again to 48.4 after falling first, to 49.0 the previous month.

"The only good news again came from the further easing in price pressures," Williamson added.

Activity was down for the fourth month running in the remainder of the 17-nation eurozone.

"Tensions are eroding confidence and tightening financial and monetary conditions," said Paris-based BNP Paribas analyst Clemente De Lucia. "Under these conditions, businesses might decide to postpone their investments."

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