Strongest contraction in the eurozone economy in almost three years (HCOB PMI indices)

(Boursier.com) — The latest HCOB PMI data produced by S&P Global highlighted a further contraction in the euro zone economy at the start of the fourth quarter, extending the period of decline in activity that had begun at the start of the semester. The pace of contraction also accelerated compared to September, posting its highest level since November 2020.

At the same time, the deterioration in demand continued, as evidenced by the largest decline in new business since September 2012 during the sovereign debt crisis (pandemic period aside). Another trend highlighting the darkening economic outlook in the region and marking the end of a thirty-two month period of continuous employment growth, company workforces stagnated in October.

The seasonally adjusted HCOB composite PMI index of overall activity thus falls below 50 for a fifth consecutive month, at 46.5. At 47.8 compared to 48.7 in September, the HCOB PMI index for the services sector fell to a thirty-two month low in October and thus signaled a third consecutive monthly decline in the activity, more marked than that observed the previous month.

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, comments on the latest results of the survey: “The euro zone services sector had a difficult start to the fourth quarter, marked by a third consecutive monthly decline of activity as well as by a very sharp decline in the overall volume of new business. The coming months therefore promise to be difficult for service providers, as highlighted by the business activity outlook for companies which, despite a very slight improvement by compared to September, remain significantly lower than their long-term average.