Eurozone ‘remains close to stagnation’ amid manufacturing slump
The Eurozone remains close to stagnation, according to a fresh set of gloomy manufacturing figures released this morning.
The bloc’s rate of growth was among the weakest seen in the past six-and-a-half years during October, underlining fears of a slowdown in some of Europe’s biggest economies.
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Output in the Eurozone edged up slightly month-on-month, but the IHS Markit PMI composite output remained close to the crucial 50.0 no-change mark.
Whereas manufacturing firms recorded a ninth successive month of declining production, service sector companies indicated further growth, albeit at the second-weakest rate since January.
Chris Williamson, chief business economist at IHS Markit, said: “The euro area remained close to stagnation in October, with falling order books suggesting that risks are currently tilted towards contraction in the fourth quarter.”
He added: “Worryingly, what little growth was seen in October was supported by firms eating into previously placed work, meaning demand needs to revive to boost new business inflows and prevent more firms coming under further pressure to cut activity and jobs.”
Germany was the only country to contract in private sector output during October, with Italy, Ireland and Spain all recording marginal gains compared to September.
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The euro area also suffered its second successive monthly decline in new work.
Weakness was centred on the manufacturing economy, where another marked fall in new orders was recorded and there was a sharp reduction in foreign demand, today’s report said.
Overall exports were down for a thirteenth successive month, with the rate of decline amongst the sharpest in the series history.