Euro area business growth slows to a four-month low in October as French output shrinks and factory costs climb

Private sector growth in the euro area cooled at the start of the fourth quarter, according to the S&P Global flash eurozone purchasing managers' survey released at 10 a.m. Frankfurt time on Friday.

The composite output index fell to 51.9 from a final 53.1 in September, its lowest in four months. Anything above 50 still means growth, and activity has now expanded for four straight months. The services business activity index slipped to 51.7 from 53.0, and the manufacturing PMI eased to 52.4 from 52.9.

France was the drag. Its separate flash composite index dropped to 48.4 from 51.1, back into contraction a month after its first rise in 10 months, while Germany slowed to 52.8 from 53.8. New orders across the bloc rose only slightly and employment was broadly unchanged.

Costs went the other way. Manufacturers reported the steepest rise in input prices since May, often citing energy, fuel and transport, although selling prices rose more slowly than in September. Chris Williamson, chief business economist at S&P Global Market Intelligence, said the reading was consistent with GDP growth of about 0.3 percent a quarter and that sustained growth alongside elevated inflation would likely feed speculation about more aggressive tightening by the European Central Bank.

The flash figures draw on about 85 percent of usual responses, collected October 12 to 21. Final readings follow on November 2 and November 4.