November saw business activity fall across the eurozone for the fifth consecutive month, adding to fears of a recession, the latest flash purchasing managers indexes showed.
The S&P Global eurozone composite PMI rose to 47.8 in November from 47.3 in October, according to the preliminary reading. This is above the forecast of 47.0 of economists polled by The Wall Street Journal.
“The PMI data for the fourth quarter so far put the eurozone economy on course for its steepest quarterly contraction since late-2012, excluding pandemic lockdown months,” S&P Global said in the report.
Manufacturing continued to lead the downturn, with factory output dropping for a sixth consecutive month, although the rate of decline eased, the report said. Service sector output also fell, down for the fourth consecutive month.
The November PMI data also bring some tentative good news, Chris Williamson, chief business economist at S&P Global Market Intelligence, said. The economist pointed out that the overall rate of decline has eased compared to October thanks to some easing in supply constraints and the warm weather easing fears regarding energy shortages.
Price pressures are showing signs of cooling, which should contain inflation. However, both manufacturing and services sectors are still under severe pressure, the economist said in the report.
“A recession therefore looks likely, though the latest data provide hope that the scale of the downturn may not be as severe as previously feared,” Mr. Williamson said.
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