Euro zone private sector activity slows in November

A A A - Private sector activity in the euro zone lost momentum in November according to data released by Markit on Thursday, underlining concerns over the economic outlook for the currency bloc, after data last week showed that growth slowed in the third quarter.

The Markit euro zone's manufacturing purchasing managers' index ticked up to 51.5 in November from a final reading of 51.3 in October.

However, the euro areas services PMI declined to 50.9 this month from 51.6 in October, disappointing expectations for an increase to 51.9.

"The average reading over the fourth quarter so far is signaling a very modest 0.2% expansion of GDP across the region, and it looks like momentum is being lost again", Chris Williamson, chief economist at Markit said.

"The fall in the PMI for a second successive month suggests that the European Central Bank was correct to cut interest rates to a record low at its last meeting, and the further loss of growth momentum will raise calls for policymakers to do more to prevent the euro zone from slipping back into another recession".

The ECB surprised investors after it unexpectedly cut rates to a record low 0.25% earlier this month amid concerns over mounting deflationary pressures in the euro area.

"Attention will also be focused on the signs that deflationary forces may be gathering," he added.

Germany's manufacturing PMI rose to a 29 month high of 52.5 in November, from 51.7 in October, while the services sector PMI rose to a nine-month high of 54.5 from 52.9.

But weaker-than-expected French data indicated that activity in the euro zone's second-largest economy contracted for the first time in three months in November.

The French manufacturing PMI fell to a six-month low of 47.8 from 49.1 last month, while the services PMI dropped unexpectedly to a four-month low of 48.8 from 50.9.

Last week, Eurostat said euro zone gross domestic product expanded 0.1% in the three months to September, slowing from the 0.3% growth achieved in the second quarter when the euro zone exited a recession. offers an extensive set of professional tools for the financial markets.
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