Eurozone private sector activity contracted modestly in October following a continued contraction in manufacturing, S&P Global's preliminary research data showed on Thursday.
The HCOB flash composite production index in October was 49.7, slightly up from 49.6 in the previous month. The measured value was 49.8.
Corporate activity in the currency area decreased slightly for the second consecutive month.
overall marginal reduction work This activity concealed the continuing disconnect between the manufacturing and service sectors.
The Flash Services Purchasing Managers Index unexpectedly fell to 51.2 from 51.4 the previous month. The score was seen as 51.5.
The manufacturing PMI improved to 45.9, the highest level in five months, from 45.0 last month. The score was 45.1.
Production has shrunk due to the deteriorating demand environment, and new orders have declined for the fifth consecutive month.
Businesses responded to the decline in workload by limiting employment to the sharpest decline in about four years, while business confidence fell to the lowest level in 11 months.
On the price front, input costs rose at the slowest pace since November 2020, and production rate inflation similarly slowed to a 44-month low.
“The euro area is stuck in a bit of a rut. economy It has been slightly negative for two consecutive months,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
The European Central Bank is likely to cut its key interest rate by just 25 basis points in December, rather than 50 basis points as some have said, the economist added.
At the national level, while the situation in France worsened, the decline in Germany eased slightly. In fact, production in the rest of the euro area increased at the fastest pace in four months.
France's private sector continued to contract in October, as both manufacturers and service providers reported lower output.
The flash composite production index unexpectedly fell from 48.6 last month to 47.3, the lowest level in nine months. This was the lowest score so far this year. The expected level was 49.0.
Manufacturing PMI was 44.5, higher than last month's 44.6. The score was seen as 44.9.
The Flash Services PMI fell to a seven-month low of 48.3, down from 49.6 the previous month and continued to fall below economists' expectations of 49.8.
Germany's private sector economy slowed slightly in October as the pace of decline in production slowed slightly and business expectations improved. The flash composite production index was 48.4 in October, up from 47.5 in September, the lowest level in seven months. The score was also higher than the expected score of 47.6 points.
The service industry PMI hit a three-month high of 51.4, while the score remained unchanged from September at 50.6.
The manufacturing PMI rose to 42.6, the highest level in three months, from 40.6 last month. Economists had expected the index to rise slightly to 40.7.
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