Eurozone slows, prices climb: business confidence hits a five-month low

Economic activity in the eurozone fell in October to its lowest level in four months. The S&P Global composite index, which tracks manufacturing and services, slid from 53.1 points in September to 51.9, worse than the 52.7 economists had expected. Anything above 50 still means growth, but the direction is clear: Europe isn't stopping, it's losing speed.

The main culprit is costs. Companies are paying more for energy, fuel, transport and raw materials, and some are already raising sale prices to protect their margins. Brent crude reached 114.10 dollars a barrel on October 23, its highest in five months. Hiring in the eurozone has all but stalled, and business confidence is at a five-month low.

People feel it in their wallets. The eurozone consumer confidence index fell 1.1 points in October to minus 17.9, according to the European Commission. Across the whole EU it dropped to minus 17.3. Eurozone inflation was 3.8 percent in September, the highest in three years, and energy prices were up 18.9 percent year on year.

France as the weak link

It's worst in France, where economic activity is falling again and business confidence is at its lowest since 2012, if you leave out the pandemic. Strikes and unrest are putting extra pressure on the services sector. Over rising prices, the housing crisis and crumbling schools and hospitals, people have taken to the streets in France, Belgium, Austria, Spain, Greece, Italy and Portugal.

Europe is not in recession, for now. But when France and the eurozone slow down, the Balkans rarely stay untouched - and Macedonia does most of its trade with the European Union. Whether the slowdown reaches us too, the coming months will tell.