Euro Area: Business-activity slump deepens in October

Euro Area PMI October 2023

Euro Area: Business-activity slump deepens in October

The S&P Global Composite Purchasing Managers’ Index (PMI) fell to 46.5 in October from 47.2 in September. Consequently, the index remained entrenched below the 50 no-change threshold, signaling another deterioration in business conditions compared to the prior month.

Both the services and manufacturing PMIs contracted at sharper rates in October. Output and new orders fell at faster paces, while employment fell for the first time since the lockdowns of early 2021. That said, business confidence was somewhat less downbeat.

On the price front, input costs fell at a slower, but still significant, pace. Meanwhile, output prices increased at a softer pace.

Commenting on the release, Bert Colijn, senior economist at ING, stated:

“The eurozone PMI fell […] in October, which indicates that weakness in the business economy is worsening. A technical recession is becoming a more realistic risk, with the upside that weaker demand is cooling price pressures.”

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