Private sector economic activity in the eurozone stagnated this month, with a closely-watched survey showing only marginal growth overall and a switch into negative territory for manufacturing.

Eurozone growth remained stuck at two-year low, with the Purchasing Managers Index (PMI) leading indicator, compiled by London-based researchersMarkit, logging 51.1 points, unchanged from July.

While any score above 50 indicates growth, the manufacturing-only index sank to 49.7 points from 50.4 points in July, a 23-month low. Markit chief economist Chris Williamson said “a number of factors have hit growth, including a downturn in global demand, which caused exports of goods to fall at the fastest rate for over two years, and growing concerns about the economic outlook and the euro area’s financial crisis, which caused business confidence to plunge. “The data raise the prospect that economic growth in the third quarter could be even slower than the disappointing 0.2 per cent rise seen in the three months to June,” Mr Williamson said.

“Most worrying is the near-stagnation in Germany, which suggests that the region’s main engine of growth has stalled. Since its cyclical high in February, the index has lost more than seven points,” said Paris-based BNP Paribas analyst Clemente De Lucia of the survey of 4,500 companies in services and manufacturing in the 17-nation eurozone. Milan-based UniCredit analyst Marco Valli said that the survey continued “to point to very modest growth but no recession.”