Economic Buzz: Eurozone Services PMI At 48.6 In October

4 Nov 2022 , 02:39 PM

The eurozone economy registered its fourth successive month-on-month contraction in private sector business activity at the start of the fourth quarter. The rate of decline was the sharpest since November 2020 and, excluding those months affected by pandemic restrictions, marked the deepest downturn since the first half of 2013. A steeper reduction in manufacturing output was accompanied by an accelerated decline in service sector activity during October. Underpinning downturns across each sector were further slumps in new orders, with uncertainty, high prices and generally weak underlying demand conditions cited by survey respondents. Consequently, backlogs of work across the euro area continued to fall while business confidence was little changed from September, which was the lowest since the initial COVID-19 shock in the first half of 2020. The seasonally adjusted S&P Global Eurozone Composite PMI Output Index recorded below the crucial 50.0 mark that separates growth from contraction for a fourth successive month in October. At 47.3, the headline index fell from 48.1 in September to its lowest level since November 2020. Overall, this signaled a contraction in business activity across the euro area and one that, excluding the pandemic period, was the sharpest since April 2013. The downturn reflected stronger contractions across both the manufacturing and service sectors, with the more significant drag coming from the former. The S&P Global Eurozone Services PMI Business Activity Index slipped to 48.6 in October. This was down from 48.8 in September, signaling a third successive decrease in service sector activity. The rate of decline was the fastest since February 2021, albeit modest overall. Activity levels were pulled lower by weaker demand. The level of incoming new business placed with euro area services firms fell in October for a fourth straight month. As was the case with output, the decrease was the strongest since February 2021.Powered by Commodity Insights