FXstreet.com (Barcelona) - The weak Eurozone PMI outturn for
November is a major disappointment in light of the increases in the
German and French PMI surveys, and suggest that that the recession
on the Eurozone's periphery is gathering further pace. The lack of
change in the headline composite index (45.8 versus 45.7 in
October) reflected diverging movements across the main components.
In a clear sign that fiscal tightening continues to take a heavy
toll on domestic demand, the services PMI fell from 46.0 to a
40-month low of 45.7. The manufacturing PMI, by contrast, improved,
but at 46.2 it remains in deep contraction territory.
Looking at the available country data, the French composite output
index rose for a second month from 43.5 to 44.6, while the German
equivalent also edged higher from 47.7 to 47.9. A flash estimate
for the other Eurozone countries is not available, but the average
for this group sank further into contraction territory - which
arguably is the most disturbing aspect of today's report.
"All in all, today's PMI figures confirm that the Eurozone economy
remains firmly stuck in recession. Looking ahead, we still think
that ECB's recent actions and the improvement in the global economy
(as signaled by the further pickup in the Chinese PMI) will provide
some respite to the Eurozone economy. However, with the fiscal
squeeze across the region continuing, any return to positive growth
next year will likely be slow and gradual - and largely confined to
the 'core' countries." writes Analyst Martin van Vliet at ING.