The private sector activity in the euro area has experienced in November slowest pace of expansion in the last 16 months , as reflected in the progress of PMI composite index, which stood and n 51.4 from 52.1 the previous month , which raises the risk of a new downturn.
The growth slowdown in activity is explained by the worsening situation in services , the PMI index fell to 51.3 points from 52.3, its lowest level in eleven months, while manufacturing fell to 50.4 points , up from 50.6 in October, its lowest in two months.
“The euro zone is struggling to generate some growth, as the PMI indicates that it is likely that GDP has increased from 0.1% to just 0.2% in the fourth quarter” said Chris Williamson, chief economist at Markit.
However, the head of the survey warns that “the fall of the euro zone PMI to its lowest in the past 16 months raises the risk that the region will slip back into a further contraction “.
Among the most worrying aspects of the progress of the PMI survey highlights the slight reduction in the volume of new orders, has fallen for the first time since July 2013.
Meanwhile, employment has stabilized after declining marginally for the first time in eleven months in October, but usually companies are still reluctant to increase their workforce by economic uncertainty and weak demand.
In turn sales prices fell again in the two sectors studied , following the trend of falling prices that has been observed since April 2012, although the rate of decline has moderated somewhat in November.
“A fall in new orders for the first time in nearly a year and a half, although only marginal, suggesting that growth may continue to slow in December ,” says Williamson.
“Those responsible for monetary policy undoubtedly be disappointed to see that ads and measures of recent stimulus show no signs of reviving growth,” added the economist, who expected to increase the pressure on the ECB to take further steps to strengthen the economy.
On the other hand, the advance of the PMI survey France again showed a further contraction in November of the activity, although the indicator stood at 48.8 points from 48.3 in October, its highest level in two months.
In particular, the French service sector improved to 48.8 points from 48.3 the previous month, while manufacturing worsened from 48.5 to 47.6 points.
Still, the French private sector activity remains at recessionary field for the seventh consecutive month.
In the case of Germany, the data in advance of the compound PMI fell to 52.1 points in November from October’s 53.9 , at least 16 months, with a worsening in the service sector at 52.1 points, up from 54.4 the previous month, while manufactures fell 50 points from 51.4 in October.
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