Eurozone PMI November 2022

The Eurozone Express Purchasing Managers’ Index (PMI) rose to 47.8 in November from 47.3 in October, the worst reading in almost two years. However, the index remained below the no-change threshold of 50 points, signaling another deterioration in business conditions from the previous month.

November growth was caused by a less pronounced contraction in activity in the manufacturing sector. New orders fell at a softer pace. Moreover, business confidence has grown, although by historical standards it has remained subdued. On the price side, both entry and exit inflation eased as supply constraints eased and demand contracted. However, both remained elevated.

Commenting on the release, Chris Williamson, chief economist at S&P Global Market Intelligence, said:

“It is clear that manufacturing is still in an alarmingly severe downturn and services activity is also still under strong pressure, mainly due to the cost of living crisis and the recent tightening of financial conditions. Therefore, a recession looks likely, although the latest data gives hope that the scale of the recession may not be as severe as previously feared.”

Meanwhile, Bert Colaine, senior economist at ING, said:

“The benefit of a clearly recessionary environment is that inflationary pressures are easing. Weaker demand, lower energy prices than in August, and easing supply concerns are helping ease price pressures. While energy prices remain volatile and businesses are likely to continue to factor in some of the higher costs, these factors do point to a turning point in year-end inflation.”

FocusEconomics Consensus Forecast experts expect fixed investment to grow by 3.6% in 2023, unchanged from last month’s forecast. In 2024, experts predict an increase in investment in fixed assets by 3.1%.