(Tiper Stock Exchange) – The Eurozone services sector is holding back sharply in August 2023, freezing the European economy as a whole, that falls into recession. The Purchasing Managers Index tertiary activities in the Eurozone it was in fact a 47.9 points from the previous 50.9, slipping below the critical threshold of 50, the watershed between growth and contraction, and resulting lower than the expected 48.3 by analysts.
In the same period the PMI Composite is indicated declining a 46.7 points from the previous 48.6 points and compared to 47 of the expected by analysts.
As regards the most important economies of the Euro Area, Italy sees the composite PMI fall to 48.2 points from 48.9 after the services PMI fell to 49.8 from 51.5 (expected at 50.2). In Francethe composite PMI drops to 46 points from 46.6 and that of the tertiary sector to 46 from 47.1 (against expectations for 46.7). Germany sees the composite PMI drop to 44.6 points from 48.5 and the services PMI to 47.3 from 52.3 (in line with the consensus). In the end, the Spanisha sees a decline in the PMI services to 49.3 points from 52.8 and compared to expectations for 51.5.
“The eurozone did not slip into recession in the first part of the year, but this second half will present more challenges. And this is highly likely, given that the performance of the tertiary sector which served as a stabilizer begins to weigh on the economy while the manufacturing hasn’t started picking itself up again yet,” he says Cyrus de la RubiaChief Economist at the Hamburg Commercial Bank, adding “The disappointing numbers helped correct our real-time forecasts of GDP which, for the third quarter, now stand at -0.1%“.
“Among the eurozone countries, the slowdown comes mainly from Germany and France – continues the expert – where the activity of the tertiary sector has indicated the fastest deterioration during this year. Italy and Spain, on the other hand, recorded relatively small contractions in August. Judging by what happened in Germany and France, however, it seems that Italy and Spain will not be able to dodge a decline of the more severe tertiary sector.”
(Photo: Mika Baumeister on Unsplash)