France and Germany's sluggish economies have been highlighted as the reason for a slowing of business growth in the eurozone.
The latest Markit Composite Purchasing Managers' Index (PMI) stood at 52.8 for August, a decline from the 53.8 in July. Any figure over 50 represents growth in the market but analysts believe it could have been more positive had it not been for the poor performances of economies in both France and Germany.
Both countries saw an overall drop with France experiencing a contraction within its manufacturing sector. The country, which saw its service sector perform strongly over the course of August, posted a reading of 50. It marked an improvement on the 49.4 recorded in July but did not match the growth rate seen in other countries around the eurozone.
In Germany, its PMI actually from 55.7 in July to 54.9 hampered the rest of the eurozone continue its recovery following the financial crash of 2008. The poor performance of both France and Germany comes before any of the repercussions felt by new sanctions imposed on Russia due to the crisis in Ukraine.
Rob Dobson, senior economist at Markit, said: "Even before rising geopolitical headwinds began to buffet the economy, the double-digit unemployment rate prevailing in the eurozone was already excessively high. Signs are that the modest job creation of recent months has stalled in August."
The European Union and US imposed fresh sanctions on Russia following the alleged shooting down of Malaysian Airlines flight MH17 by rebels in eastern Ukraine. In retaliation to the move, Russia announced a full embargo on food imports from the countries involved and it has sparked fears of job losses in the UK.
Companies within sectors such as fishing conduct a lot of business with Russia and there is a fear that without a lack of investment it could lead to a drop in revenues.
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