Business confidence in the eurozone has slumped to a 17-month low as rising geopolitical tensions and inflation weighed on the outlook, the latest survey of purchasing managers shows.
The PMI report also shows that eurozone companies raised their prices for goods and servics at the fastest rate on record.
Firms passed on a record rise in their own input costs, as energy, fuel and commodity prices all soared.
The PMI report also showed that the eurozone private sector kept growing last month, but the outlook has deteriorated.
Chris Williamson, Chief Business Economist at S&P Global says firms face a spike in energy and other commodity prices due to Russia’s invasion of Ukraine, worsening supply chain issues and a marked deterioration in business optimism about prospects for the year ahead.
“Exports are already back in decline as the war has directly hit travel and transport, and the downturn in confidence suggests that domestic demand conditions across the eurozone could also come under pressure, notably from consumers via the soaring cost of living, at the same time as companies struggle with a lack of materials.
“The outlook for growth has therefore deteriorated at a time when the inflation outlook has worsened.”
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