Eurozone business activity contracts as composite PMI hits 10-month low
By Benjamin Chiou
Date: Friday 22 Nov 2024
(Sharecast News) - Business activity in the eurozone unexpectedly declined in November, according to a flash reading from the Hamburg Commercial Bank purchasing managers' index (PMI) released on Friday morning, which dropped to its lowest level in 10 months.
The eurozone composite PMI compiled by HCOB and S&P Global declined to 48.1 this month, down from the neutral 50-point level seen in October.
This was the lowest reading since January and well below the consensus forecast of 50.0, as both indices recording services and manufacturing activity moved into negative territory.
The services sector, which had propped up growth so far this year, slipped to 49.2 in November from 51.6 the month before, registering its first sub-50 result since January.
The manufacturing PMI, meanwhile, slipped to 45.1 from 45.8, with the contraction in industrial activity remaining firmly entrenched.
Across both services and manufacturing, confidence in the output outlook fell to its lowest levels in more than a year, with companies continuing to face challenges securing new orders, which declined for the sixth straight month.
Firms also scaled back workforce numbers as levels of new business and order backlogs fell, while input cost inflation and output prices ticked up over the month.
"Things could hardly have turned out much worse," said Cyrus de la Rubia, chief economist at HCOB. "The eurozone's manufacturing sector is sinking deeper into recession, and now the services sector is starting to struggle after two months of marginal growth.
"It is no surprise really, given the political mess in the biggest eurozone economies lately - France's government is on shaky ground, and Germany's heading for early elections. Throw in the election of Donald Trump as US president, and it is no wonder the economy is facing challenges. Businesses are just navigating by sight."
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