Growth in the euro zone services sector fell to its slowest rate in six months in March as the Madrid train bombings hit new business and dented confidence, a survey of over 2,000 companies showed today.
The Reuters Eurozone Business Activity Index, which was compiled after the March 11th attacks, dropped to 54.4 - its lowest since last September - from 56.2 in February.
"Overall there was probably an impact from the Madrid bomb attacks," said Mr Elwin de Groot at Fortis Bank in Amsterdam.
He added: "The key message of this report is that growth is continuing, albeit at a somewhat slower pace than in the months before."
Economists had expected a smaller fall to 56.0, but the index still kept well above the key 50 no-change line that divides growth from contraction for a ninth consecutive month.
"The decline in March reflects an already existent downward trend in growth of new business which was exacerbated by the bombings in Madrid," said Mr Chris Williamson, chief economist at NTC Research, which compiles the survey.
The survey collected data from service firms such as airlines, banks and retailers in Germany, France, Ireland, Italy and Spain, which together account for 83 per cent of private sector services output in the 12-nation euro zone.
Services activity expanded more slowly in all the four largest economies - Germany, France, Italy and Spain - with the biggest slowdown in Spain, reflecting the impact of the Madrid bombings and disruption from national elections.
A companion survey of euro zone manufacturers last week showed firms put in their best performance in over three years in March, although growth remained modest.