Composite PMI points to stalled conditions in November
Leading indicators point to stagnating dynamics in the Eurozone’s economy in the second month of Q4. The Flash Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 50.3 in November, slightly down from October’s 50.6 and marking one of the worst results in over six years. As a result, the PMI edged down closer to the 50-point threshold that distinguishes expanding business activity from contracting business activity in the Eurozone.
The details of the release revealed that the effects of manufacturing recession are spilling over to the services sector. The manufacturing PMI ticked up but remained well below the crucial 50-point threshold nevertheless, amid falling output and new orders. Meanwhile, the services sector continued to outperform the manufacturing sector, although it lost steam compared to the previous month. Service sector activity weakened from October and expanded at one of the weakest paces since 2014. Job growth lost pace in the services sector, while factory employment fell for the seventh consecutive month. Meanwhile, firms’ expectations of output improved somewhat in the manufacturing sector—although they remained downbea—, while in the services sector they declined.
Regarding the Eurozone’s two largest economies, Germany’s composite PMI lingered in contractionary territory for a third consecutive month but business conditions improved in France. Elsewhere, the PMI pointed to stalling activity in the region.