Euro zone economy started Q4 on back foot, stoking recession fears -PMI



The downturn in euro zone business activity accelerated last month as demand in the dominant services industry weakened further, a survey showed on Monday, suggesting there is a growing chance of a recession in the 20-country currency union.


The economy contracted 0.1% in the third quarter, official data has shown, and Monday's final Composite Purchasing Managers' Index (PMI) for October indicated the bloc entered the final quarter of 2023 on the back foot.


HCOB's PMI, compiled by S&P Global and seen as a good guide of overall economic health, fell to 46.5 in October from September's 47.2, its lowest reading since November 2020 when COVID-19 restrictions were tightened on much of the continent.


That was below the 50 mark separating growth from contraction for a fifth consecutive month and matched a preliminary estimate.


"Final PMIs released today confirmed the preliminary estimates and are consistent with our forecast that euro-zone GDP will contract again in Q4," said Adrian Prettejohn at Capital Economics.


"The outlook also looks very weak, with the new orders PMI falling to its lowest level since September 2012, excluding the early pandemic months, while exports were also particularly weak."


Manufacturing activity took a further step back in October, according to a sister survey last week which showed new orders contracted at one of the steepest rates since the data was first collected in 1997.


It was a similar picture for services and the new business index, a gauge of demand, was its lowest since early 2021 as indebted consumers feeling the pinch from price rises and increased borrowing costs kept their hands in their pockets.


Services activity in Germany, Europe's largest economy, slipped back into contraction in October amid persistent weakness in demand while in France it shrank again.


Italian services activity contracted for a third month running and at its fastest pace in a year but Spain bucked the trend and its services sector grew at a slightly faster rate last month.


In another bright spot, investor morale in the euro zone rose more than expected at the start of November, with expectations for the future at their rosiest since early this year, Sentix's index showed on Monday.


Last month the European Central Bank left interest rates unchanged at record highs, ending an unprecedented streak of 10 consecutive rate hikes, but insisted growing market talk of rate cuts was premature.


Policymakers there, who have failed to get inflation to target, will likely take some cheer from easing price pressures shown in the PMI survey, as both the input and output prices indexes fell from their September readings.


Source : / November 06, 2023 logo


240 rue Evariste Galois,

06410 Biot,

Sophia Antipolis

Automata Pay

65-66 Warwick House 4th

Floor, Queen Street, London

England, EC4R 1EB

Automata Pay Europe Ltd

3rd Floor Ormond Building,

31-36 Ormond Quay Upper,

Dublin 7, D07 Ee37

Automata ICO Ltd

Italian Branch

Via Archimede, 161,

00197 Roma


The purchase of digital assets is subject to a high market risk and price volatility. Changes in value can be significant and occur rapidly and without warning. Past performance is not a reliable indicator of future performance. The value of an investment and returns can fluctuate both up and down, and you may not recover the amount you invested. RISK WARNING

Automata ICO Limited has a branch in Italy with its registered office at Via Archimede, 161, Roma, Italy, and registered in Italy under number 96550860587 with the Organismo Agenti e Mediatori (OAM) as a Virtual Asset Service Provider (VASP).

Automata France SAS is a company registered in France with the company number 902 498 617. Automata FRANCE SAS is registered with the french Financial Market Authority, l’Autorité des marchés financiers (“AMF”), as a provider of Virtual Asset Service Provider under number E2023-087.

Automata Pay Europe Limited is a partner of Modulr Finance B.V., a company registered in the Netherlands with company number 81852401, which is authorised and regulated by the Dutch Central Bank (DNB) as an Electronic Money Institution (Firm Reference Number: R182870) for the issuance of electronic money and payment services. Your account and related payment services are provided by Modulr Finance B.V. Your funds will be held in one or more segregated accounts and safeguarded in line with the Financial Supervision Act. How we keep your money safe.