The private sector in the euro area is not yet benefiting from any easing. This is signalled by current survey results among purchasing managers (PMI). In October, the comprehensive „composite PMI“ reached a value of 50.2. This is a weak increase of 0.1 points compared to the previous month. This does not change much about the picture of „cautious confidence“ in the EMU economy. Business prospects remain gloomy, mainly due to the global trade conflicts, the „Brexit drama“ and general concerns about a global slowdown in growth.
However, the PMI results also suggest that the latest reports on possible (partial) solutions to the US-China trade dispute have not yet been fully reflected in the October survey results. However, it is precisely this news that has the potential to loosen the loop around European industry to some extent.
Developments in the two largest EMU economies have been mixed. Hopes for a resounding improvement in Germany have been temporarily dispelled by the PMI survey results for October. The composite index figure also rose slightly by 0.1 points. At 48.6%, however, the mood in the German economy remains mixed. After all, the battered manufacturing industry recorded no further decline in sentiment. However, the service sector was apparently unable to break away from the overall poor industrial sentiment and continued to lose ground slightly.
French purchasing managers, on the other hand, are much more confident. The composite index rose by 1.8 points to 52.6 points. The service sector in particular was able to score noticeably higher than in the previous month. However, the manufacturing sector also recorded gains. The „Manufacturing PMI“ rose moderately to 50.5 points. French industry thus continues to prove relatively resilient compared to the rest of the euro zone.
Further development depends on numerous risk factors. For example, the signals of easing tension from the US-Chinese trade conflict are offset by possible US customs threats on European cars in November. This could put further worries in the face of European industry and is unlikely to improve the medium-term outlook.