LONDON (Reuters) – Euro zone enterprise exercise took a surprisingly sharp flip for the more serious this month because the bloc’s dominant providers business contracted and manufacturing sank deeper into recession, a survey confirmed on Friday.
HCOB’s preliminary composite euro zone Buying Managers’ Index, compiled by S&P World, sank to a 10-month low of 48.1 in November, under the 50 mark separating progress from contraction.
A Reuters ballot had predicted no change from October’s 50.0.
“Things could hardly have turned out much worse,” stated Cyrus de la Rubia, chief economist at Hamburg Industrial Financial institution. “The euro zone’s manufacturing sector is sinking deeper into recession, and now the services sector is starting to struggle after two months of marginal growth.”
The composite new enterprise index fell to 46.6 from 47.9, its lowest studying this 12 months, suggesting no imminent enchancment.
A PMI protecting providers, which had been offsetting the decline amongst producers, fell to a 10-month low of 49.2 from 51.6. The ballot forecast was for no change.
Companies did enhance headcount once more however have been much less optimistic concerning the 12 months forward. The enterprise expectations index fell to a two-year low of 55.0 from 59.9.
The manufacturing PMI index fell to 45.2 from 46.0, confounding expectations for no change.
An index measuring output, which feeds into the composite PMI, dropped to 45.1 from 45.8. That was regardless of factories reducing their expenses for a 3rd month and at a steeper tempo than in October. The output costs index dropped to 47.9 from 48.2.
The drop is more likely to cement expectations the European Central Financial institution will lower rates of interest once more subsequent month. The financial institution has lower charges thrice this 12 months to three.25% amid rising considerations concerning the bloc’s lacklustre progress outlook.
