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Eurozone economy remains close to stagnation in November

By Michele Maatouk

Date: Friday 22 Nov 2019

LONDON (ShareCast) - (Sharecast News) - The eurozone economy remained close to stagnation in November, according to preliminary figures released on Friday.
IHS Markit's flash eurozone composite purchasing managers' index, which measures activity in the services and manufacturing sectors, came in at 50.3, down from 50.6 in October and missing expectations of 50.9.

The flash manufacturing PMI printed at 46.6 this month, up from 45.9 in October and ahead of expectations for a reading of 46.4. However, it remained below the 50 mark that separates contraction from expansion.

The services PMI fell to 51.5 from 52.2 in October, missing expectations for a reading of 52.5 and marking the lowest level so far this year.

The flash manufacturing PMI for Germany rose to 43.8 in November from 42.1 the month before, beating a forecast of 42.9 but remaining well below the 50 mark.

Chris Williamson, chief business economist at IHS Markit, said: "The eurozone economy remained becalmed for a third successive month in November, with the lacklustre PMI indicative of GDP growing at a quarterly rate of just 0.1%, down from 0.2% in the third quarter.

"Manufacturing remains in its deepest downturn for six years amid ongoing trade woes, and November saw further signs of the weakness spilling over to services, notably via slower employment growth.

"Resilient jobs growth had provided a key support to the more domestically-focused service sector earlier in the year, but with employment now rising at its slowest pace since early-2015, it's not surprising to see the service sector now also struggling."

He said business remains concerned by trade wars, Brexit and a general slowdown in demand, with heightened uncertainty about the economic and political outlook driving further risk aversion.