Europe’s New Lockdowns Push Economy Toward Another Slump
(Bloomberg) -- The euro-area economy ground to a halt in October and will probably shrink in the coming weeks after governments reinstated lockdowns to contain the pandemic.
A monthly survey showed demand at businesses fell for the first time in four months, led by a slump in services. That sector is being particularly affected by the new curbs, which are focused on restaurants and hospitality.
Services shrank less than initially estimated in October, and manufacturing grew. But the result still left overall private-sector activity in stagnation, with IHS Markit’s Purchasing Managers Index standing at 50.
“With lockdown measures being tightened, it is becoming increasingly hard to see how the euro-zone economy will avoid falling back into decline, especially as some countries, including France, Italy and Spain, are already contracting again,” said Markit economist Chris Williamson.
Germany was the exception. The country’s strong focus on manufacturing has helped output grow so far, but it’s a trend that might not last.
“For all countries the outlook has grown increasingly dark,” said Williamson.
©2020 Bloomberg L.P.