Eurozone recovery stutters as service sector suffers

0
17


Eurozone trade activity was hit in September as countries faced a second wave of coronavirus infections, the first data showed on Wednesday.The Eurozone Flash Composite PMI (Purchasing Managers Index) – which measures both industry and services – stood at 50.1, barely pushing into expansion territory. A reading below 50 indicates an economic contraction. This latest preliminary figure points to a three-month low in economic activity in the region.

The service sector is in a particularly dire state, data shows, with activity contracting this month to its lowest level in four months. The eurozone manufacturing sector remained in positive territory and hit a 31-month high.

“A two-tier economy is evident, with factories reporting that production growth has been supported by growing demand, especially from export markets and the reopening of retail in many countries, but the sector services as a whole fell back into decline as a face-to-face consumer – businesses in particular have been hit by heightened concerns about viruses, ”said Chris Williamson, chief economist at IHS Markit, in a statement , along with the data.

The European Center for Disease Prevention and Control said as of September 22, there had been 2.9 million confirmed infections in the region, with Spain and France now seeing daily cases exceed the 10 mark. 000. Governments have announced new restrictions to prevent the spread of the virus and economists have begun to consider the economic ramifications of the new measures.

“The sharp increase in Covid-19 cases recorded across France in September helped explain the first decline in business activity since May,” said Eliot Kerr, economist at IHS Markit on Wednesday.

The sharp decline in activity in French services was not fully offset by manufacturing output. This led to France’s overall index falling for the first time in four months, IHS Markit reported.

In Germany, the pace of economic recovery has slowed but has been somewhat offset by its manufacturing industry. “The main concern right now, then, is whether the weakness in September’s data will intensify in the fourth quarter, and push back into recession after a frustrating and brief rebound in the third quarter,” said Williamson.

LEAVE A REPLY

Please enter your comment!
Please enter your name here