According to PMI, services and manufacturing indices in the Euro Area continued to decline in October. The deterioration continued in the two largest economies of the Eurozone.
According to S&P Global data, the leading manufacturing PMI index in the Euro Zone fell to 46.6 from 48.4 in October, falling to its lowest level in 29 months. The Services PMI decreased from 48.8 to 48.2, in line with the forecasts. The composite PMI fell from 48.1 to 47.1; expectations were 47.6.
“The euro area economy will likely contract in the last quarter, accelerating production loss and worsening demand outlook. A recession looks increasingly inevitable,” said Chris Williamson, S&P Global Chief Economist.
“Therefore, the risks are down towards the end of the year,” Williamson said, adding that demand has fallen sharply, and companies are becoming more worried as high inventories and sales are lower than forecast.
According to the data released in the Euro Zone, inflation reached a record 9.9 percent in September.
Manufacturing PMI in Germany was 45.7 in October; the forecast was 47. Service PMI fell to 44.9, in line with forecasts.
The composite PMI index in the country fell from 45.7 to 44.1 in October. In France, the composite PMI index fell to 50.
In France, the services PMI fell to 51.3, while the manufacturing PMI was 47.4. The expectation was 47. A value below 50 indicates a contraction in the sector.
The energy crisis after Russia’s invasion of Ukraine is putting pressure on the manufacturing sector in Germany. The data released on Friday in Germany is expected to show that the economy contracted by 0.2 percent.
S&P Global Economist Phil Smith said: “Pioneering PMI data show that the probability of a recession in the Eurozone’s largest economy is imminent.”
