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Euro zone likely entering recession as price rises hit demand: Survey

Overall demand in the euro zone fell to its lowest since November 2020, when the continent was suffering a second wave of Covid-19 infections

Topics
Recession | Europe economy | Russia Ukraine Conflict

Reuters 



Recession, Inflation, Economy
The downturn in German business activity deepened as higher energy costs hit Europe's largest economy and companies saw a drop in new business, data showed

A downturn in business activity across the euro zone deepened in September, according to a survey which showed the was likely entering a as consumers rein in spending amid a cost of living crisis.

Manufacturers were particularly hard hit by high energy costs after Russia's invasion of Ukraine sent gas prices rocketing, while the bloc's dominant services industry suffered as consumers stayed at home to save money.

S&P Global's flash Composite Purchasing Managers' Index (PMI), seen as a good gauge of overall economic health, fell to 48.2 in September from 48.9 in August, as expected by a Reuters poll.

“The third decline in a row for the euro zone PMI indicates business activity has been contracting throughout the quarter. This confirms our view a could have already started,” said Bert Colijn at ING.

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The downturn in German business activity deepened as higher energy costs hit Europe's largest and companies saw a drop in new business, data showed.

However, in France activity was higher than expected although its PMI showed the euro zone’s second biggest was still struggling as a modest rebound in services offset a slump in the manufacturing industry.

The euro, German government bond yields and stocks all fell after the PMI data.

Overall demand in the euro zone fell to its lowest since November 2020, when the continent was suffering a second wave of Covid-19 infections.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)


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First Published: Fri, September 23 2022. 22:17 IST

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