Pandemic puts brakes on eurozone business activity
25 Octobre, 2020, 00:19 | Auteur: Auguste Feret
The latest numbers coincided with a period of new restrictions across the euro zone as it grapples with a second wave of coronavirus infections.
Any reading above 50 points indicates that business activity is expanding, but a level below 50 points means the economy is contracting.
Chris Williamson, chief business economist at IHS Markit, said: "The pace of United Kingdom economic growth slowed in October to the weakest since the recovery from the national Covid-19 lockdown began".
IHS Markit's flash Composite Purchasing Managers' Index fell to a four-month-low of 49.4 from September's final reading of 50.4, below the 50-mark separating growth from contraction.
The latest figures showed that manufacturing has remained somewhat resilient over the past month, but activity in services has fallen to its lowest level in five months.
The services sector accounts for about 80 per cent of the United Kingdom economy and bears the brunt of tighter restrictions.
These were the details of the news The second "Corona" wave impedes the recovery of the euro area for this day.
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France introduced a new curfew last week and made a decision to extend it to more regions on Thursday, which means restaurants and bars in cities like Paris, Marseille and Lyon should close at 9 pm local time. On Thursday, French authorities reported the highest ever number of new daily infections. An index measuring production, which feeds into the composite PMI, rose to 57.8 points from 57.1, its highest level since early 2018.
As injuries and deaths rose, optimism waned. Meanwhile, Ireland announced a four-week ban on home visits and Germany advises people not to travel to ski resorts.
France's composite output index came in at 47.3 in October, a five-month low, in comparison with 48.5 in September.
"The difference is more pronounced in terms of country. While Germany is buoyed by its manufacturing sector booming to a degree exceeded only twice in nearly 25 years of survey history, the rest of the region has sunk into a deepening downturn".
The challenges that the euro zone is facing in the wake of the pandemic are putting additional pressures on the European Central Bank.
PMIs are the most recent and comprehensive indicator of economic activity for October and are monitored by policymakers to decide on further measures to support the economy as its fragile recovery is threatened by the virus and high Brexit uncertainties.
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