LONDON, Oct 24 (Reuters) – Eurozone private sector activity suffered its sharpest contraction in nearly two years in October as the cost of living crisis made consumers more cautious, hurting demand, Monday show preliminary results of S&P Global’s monthly survey of purchasing managers.
The composite PMI index, considered a good barometer of the overall development of the economy, fell to 47.1 as a first estimate after 48.1 in September. The Reuters consensus gave it at 47.5.
This is the fourth month of contraction and the weakest figure since November 2020.
The “flash” services PMI fell, as expected, to 48.2 from 48.8.
That of the manufacturing sector, at 46.6 after 48.4 in September and against 47.8 expected, is at its lowest since May 2020. The production sub-index, which is used in the calculation of the composite PMI, stands at 44 .2 against 46.3 in September.
“With the acceleration of the decline in activity and the deterioration in demand recorded in October foreshadowing a contraction of the euro zone economy in the fourth quarter, a recession in the economy of the region seems increasingly inevitable” , said Chris Williamson, chief economist at S&P Global.
“Demand is falling at a sustained pace and companies are increasingly worried about the high level of their inventories and more modest sales than expected, especially with the approach of winter. The risk of “An acceleration of the contraction in the coming months therefore appears high,” he added.
The consumer price index calculated according to European standards posted a record increase of 9.9% on an annual basis in September. (Report Jonathan Cable, French version Laetitia Volga, edited by Kate Entringer)