Euro-Area Economy Moves Closer to Stagnation as Orders Fall
The euro-area economy came close to a halt in November as the steep decline in manufacturing spread further into services.
(Bloomberg) --
The euro-area economy came close to a halt in November as the steep decline in manufacturing spread further into services.
IHS Markit’s composite Purchasing Managers’ Index fell to 50.3 in November, missing all economist estimates. The reading just above 50 -- a level that divides expansion from contraction -- signals the region’s private sector barely grew.
Orders declined for a third straight month, employment growth slipped to the lowest in almost five years, and price pressures cooled.
The unexpected deterioration comes after the region’s two largest economies showed signs of improvement.
“Tentative signs of life in the core euro-zone countries of France and Germany are welcome news,” said Chris Williamson, an economist at IHS Markit. “But a fresh concern is that the rest of the region has slipped into decline for the first time since 2013.”
The outlook remained gloomy, with expectations about future output remaining well below levels seen earlier in the year, reflecting a range of heightened uncertainties from Brexit to trade wars.
The report comes on the heels of Christine Lagarde’s first major speech as European Central Bank president. After policy makers stepped up monetary stimulus in September, they’ve increased their calls on governments to act.
--With assistance from Mark Evans and Simbarashe Gumbo.
To contact the reporter on this story: Yuko Takeo in Tokyo at ytakeo2@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Jana Randow
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