A slowdown in euro zone business activity eased in November, suggesting the bloc’s economy will contract again this quarter as consumers continue to rein in spending, a survey showed.
Last quarter, the economy contracted 0.1%, official data showed, and November’s flash Composite Purchasing Managers’ Index (PMI) indicated that the 20-nation monetary union is on track to contract again in the fourth quarter.
The HCOB PMI, compiled by S&P Global and seen as a good guide to overall economic health, rose to 47.1 from October’s three-year low of 46.5, but remained firmly below the 50 mark that separates growth of the contraction.
A Reuters poll predicted a more modest rise to 46.9.
“Continued weakness in eurozone business surveys suggests a recession is on the horizon. The manufacturing sector remains stuck in the mud, while services continue to contract,” said Mike Bell of JP Morgan Asset Management.
Still, Germany’s recession showed signs of easing, with industrial and services activity falling more slowly than in previous months, raising hopes that a recession in Europe’s largest economy could be shallower than expected.
France also saw some improvement, but business activity contracted again this month – and more than predicted in a Reuters poll – as demand for goods and services in the euro zone’s second-largest economy deteriorated.
French industry morale remained stable in November, official statistics agency INSEE reported on Thursday.