By Laurie Laird
LONDON (MaceNews) – The Eurozone economy flatlined in October, despite widespread manufacturing strength, as the service sector contracted following a surge in Covid-19 transmissions throughout the bloc.
The composite Purchasing Managers’ Index fell to 50.0 last month, better than the flash estimate of 49.4, but below the mildly-expansionary 50.4 recorded in September, according to IHS Markit Wednesday. The decline ends three consecutive months of expansion and could herald further weakness through the autumn, with the Eurozone’s biggest economies implementing national lockdowns at the end of October.
Weakness in services accounted for all of the retreat in the broader PMI, countering a robust manufacturing expansion over the same period. Service output — which accounts for roughly 75% of Eurozone gross domestic product — declined at an accelerating pace last month, with the index sliding to 46.9 from 48.0 in September.
By contrast, manufacturing output continued to pick up steam, with the industrial PMI rising to 54.8 last month – the highest level in over two years – from 53.7 in September.
Germany was the only large Eurozone economy recording an expansion last month, thanks to the outsized role of factory sector. The composite PMI rose to 55.0 from 54.7 in September, while broader indices in France, Italy and Spain all fell to below 50, the level that separates expansion from contraction. Germany relies on manufacturing for approximately 20% of GDP, well above other major single-currency nations.
Outside the Eurozone, the UK composite PMI fell to a four-month low of 52.1 in October, from 56.5 in September, but remained above the break-even point. The service sector index declined to 51.4, the lowest level since June, from 56.1.
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Contact this reporter: laurie@macenews.com.
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