BRUSSELS: Business activity in the euro area grew in October but at a slower pace, a key survey showed on Friday, weighed down by unrest in France and higher costs.
The eurozone purchasing managers' index (PMI) published by S&P Global, a gauge of the economy's overall health, registered a reading of 51.9 in October, a decline from 53.1 in September.
A reading above 50 indicates growth, while a figure below 50 signals contraction.
Although a lower figure than September, "it is still among some of the best performances seen over the past three years", S&P chief business economist Chris Williamson said in a statement.
But, he said, "a key drag on growth was a renewed drop in business activity in the French services sector".
Some of the weakness in France could be linked to the strikes and the country's worst street unrest in years, he said, but "growth has also edged lower in the rest of the eurozone, both in terms of manufacturing and services activity".
Williamson added, "The key to the broader slowdown is the further escalation of inflationary pressures seen during the month."
The European Central Bank has lifted borrowing costs twice this year in response to the energy shock triggered by the US war on Iran, but Williamson said the higher interest rates "were starting to take a toll, dampening demand".
The survey also noted the mixed outlook in the eurozone, with "pessimism in France... contrasted with positive sentiment elsewhere".