(Finance) – From the latest data from the HCOB PMI survey and compiled by S&P Global, the eurozone economy began the fourth quarter in contraction againextending the current period of decline which continues into this second half of 2023. Compared to September, the rate of contraction in activity accelerated, marking the strongest value since November 2020. fragile demand conditions remained the particular characteristic of the data collected. Excluding the months affected by the pandemic, total orders recorded the fastest deterioration since September 2012, i.e. since the sovereign debt crisis. Consequent to the dark future economic prospects there is the stagnation of employment, which concludes a sequence of employment growth of 32 consecutive months.
Meanwhile, i Eurozone sales prices of goods and services recorded the weakest increase since February 2021, while cost inflation eased slightly from last September’s highest rise in four months. Once seasonally adjusted, theHCOB Eurozone Composite Output PMI Index, a weighted average of the HCOB PMI Manufacturing Production Index and the HCOB PMI Tertiary Activity Index, was positioned in October, and for the fifth consecutive month, at a value below the critical threshold of 50.0, which separates the expansion from contraction. At 46.5, the index also decreased from 47.2 in September, signaling a strong and accelerated contraction in production, the fastest in almost three years.
The sharper contraction in activity reported in October data reflects the worsening performance of tertiary firms, with industrial production falling to the same level as in September. The latest survey data also recorded the third consecutive month of decline in output in both monitored sectors.
With the exception of Spain (where October private sector activity indicated stagnation) the decline in output was across the board in the eurozone countries tracked by the survey. Germany and France continued to detect strong contractions and theItaly indicated the fastest worsening in a year. L’Ireland recorded its first decline in production in 11 months, but only marginally.
Demand conditions played a key role in October’s worsening activity, with new eurozone manufacturing orders falling the fastest since May 2020. The contraction in the flow of orders, if we exclude the months affected by the pandemic, was the highest since September 2012, during the sovereign debt crisis. Foreign affairs, including intra-Eurozone ones, were a considerable drag, marking one of the worst rates since 2014, when the series relating to this parameter began.
From 48.7 in September, the Index HCOB Eurozone Tertiary PMIs in October fell to a 32-month low of 47.8. This value shows a further and more rapid decline in tertiary sector activity in the euro area and, overall, records the third consecutive month of contraction.
The latest data collected during the October survey showed a worsening of the demand received from tertiary companies, with the fastest decline in new orders since January 2021. This is also a sign of the growing braking power of international customers, given the faster reduction of foreign orders in more than two and a half years.
The Eurozone tertiary sector was therefore able to focus on completing orders in a more timely manner, as evidenced by the fourth consecutive month of reduction in orders in stock. Job growth was strong, although slight and slower than September. Confidence has improved, but remains weaker than the historical average.
Finally, the Eurozone tertiary sector recorded a substantial new increase in operating costs, despite the pressures
are slightly loose. Output price inflation fell to its weakest since May 2021.
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