Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

NEWS

Euro zone economy likely contracted in Q3 amid waning demand

By Jonathan Cable

LONDON (Reuters) – The euro zone economy probably shrank last quarter, according to a survey which showed demand fell in September at the fastest pace in almost three years as indebted consumers reined in spending in the face of rising borrowing costs and higher prices.

HCOB’s final Composite Purchasing Managers’ Index (PMI), compiled by S&P Global and seen as a good gauge of overall economic health, nudged up to 47.2 in September from August’s 46.7.

But that was below the 50 mark separating growth from contraction for a fourth consecutive month, albeit just ahead of a preliminary estimate of 47.1.

Wednesday’s survey showed the downturn was broad-based as, like in August, output declined in both services and manufacturing.

Meanwhile, retail sales in the euro zone fell much more than expected in August, official data showed, pointing to weaker consumer demand as inflation remains high.

“The drop in retail sales in August and weakness in the final PMIs for September are consistent with our view that the euro zone economy will fall into recession in the second half of 2023,” said Franziska Palmas at Capital Economics.

German service sector activity edged up in September but in France the industry shrank at the fastest rate in almost three years as falling new orders and export business weighed on the euro zone’s second-biggest economy, sister surveys showed.

Italy’s services industry contracted fractionally in September for a second month although Spain’s showed some resilience and expanded slightly after dipping in August.

In Britain, outside the European Union, services companies suffered a less severe downturn than first feared, reflecting a surprise fall in inflation and the Bank of England’s decision to leave interest rates on hold.

September’s euro zone composite new business index, which monitors overall demand, fell to 44.4 from 44.6 – a low not seen since November 2020 when the world was still getting to grips with the COVID-19 pandemic.

A PMI covering the bloc’s dominant services industry remained sub-50 for a second month but did rise to 48.7 from 47.9. The flash estimate was 48.4.

That comes after a sister survey on Monday showed manufacturing activity remained mired in a deep and broad-based downturn last month as demand shrank at a pace rarely surpassed since the data was first collected in 1997.

In one bright spot, services firms increased headcount at a faster pace last month than they did in August. The employment index rose to 51.5 from 50.4.

“There is still a frenzy for workers in the services sector. Indeed, euro zone firms bulked up their teams at a faster pace than in August. That is a head-turner, considering new business is in the doldrums,” said Cyrus de la Rubia at Hamburg Commercial Bank.

“One guess could be that with the economic waters getting choppy, people are pushing back to the job hunt, letting companies plug long-lasting staff gaps.”

 

(Reporting by Jonathan Cable; Editing by Hugh Lawson and Toby Chopra)

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts