Industry continues to weigh on the mood of purchasing managers in the euro zone


The data from IHS Markit’s November survey of European purchasing managers certainly does not indicate a mood of optimism. The comprehensive composite index fell by 0.3 points to 50.3 index points. Although the index for industry was able to gain, at 46.6 points it remained well below the neutral mark of 50 points. Industry is still suffering from declining demand, especially from abroad. However, the service sector, which is still growing, is increasingly threatened by the ongoing crisis in the industry. Here, employment intentions hardly increased at all.

At 49.2 points, the German composite index remained below the neutral mark of 50 index points despite an improvement of 0.3 points. The mood among service providers declined slightly and was lower than it had been for more than three years. By contrast, the industrial index rose. Nevertheless, at 43.8 points, the index for industry remains below the growth threshold of 50 points. Service providers and industry reported a continued decline in incoming orders, although the decline was not as strong as in previous months. While the production expectations of the purchasing managers surveyed were again somewhat more positive, employment intentions remained virtually unchanged. According to the survey by IHS Markit, the weak phase of the German economy has not yet been overcome, but the negative swings in industry appear to be losing strength.

In France, the mood among purchasing managers is robust in both areas. According to the first publication, the composite purchasing managers‘ index is at 52.7 points 0.1 index points higher than in the previous month. The index for the service sector remained unchanged, and the index for industry even rose. The purchasing managers surveyed reported a brightening of demand. In industry, incoming orders even increased for the first time since August, albeit only slightly. The survey confirms our view of the French economy: the moderate growth of previous quarters is likely to continue here.

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