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ECONOMICS COMMENTARY
Nov 20, 2014
November flash eurozone PMI signals weakest eurozone growth for 16 months
The pace of economic growth in the euro area slowed to a 16-month low in November, according to the Markit Eurozone PMI". The headline index, which measures business activity in the manufacturing and services economies, fell from 52.1 in October to 51.4, its lowest since July of last year.
A fall in the eurozone PMI to a 16-month low raises the risk of the region slipping back into a renewed downturn. The single currency area is struggling to eke out any growth, with the PMI indicating that GDP is likely to have risen by just 0.1-0.2% in the fourth quarter. A drop in new orders for the first time in almost one-and-a-half years, albeit only very marginal, suggests growth could slow further in December.
France remains a key concern, with business activity falling for a seventh successive month and demand for goods and services deteriorating at a faster rate. Growth in Germany has meanwhile slowed to the weakest since the summer of last year, with demand stagnating. The rest of the region as a whole continues to outperform the two 'core' countries, though even here the rate of expansion has cooled.
Policymakers will no doubt be disappointed that recent announcements and stimulus measures are showing no signs of reviving growth. The deteriorating trend in the surveys will add to pressure for the ECB to do more to boost the economy without waiting to gauge the effectiveness of previously-announced initiatives.
Chris Williamson | Chief Business Economist, IHS Markit
Tel: +44 20 7260 2329
chris.williamson@ihsmarkit.com
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