Eurozone activity deepens slightly in contraction, according to PMI index data - revealed this Tuesday by S
This PMI -thermometer that measures activity, orders, occupation, stocks or deliveries- is a minimum in a year and a half, dragged down by a drop in the commercial sector (from 51.2 to 50.2 points), while manufacturing remains stable (from 49.8 points to 49.7). “The latest PMI data for the euro zone suggests that the economy is contracting in the third quarter of the year. The rest of 2022 will be a difficult period," says Andrew Karker, an economist at S
The data is not as bad as expected, with slight reductions, which has allowed the euro to recover some ground in the cross with the dollar, after losing parity with the US currency on Monday. The single currency is trading above $0.994 this morning from $0.9901. This loss of ground makes it more expensive to import goods, such as gas or oil: "It is possible that the economy will soon suffer an increase in imported inflation, especially energy," analyzes Gabriel Debach, market analyst at eToro.
Back to the PMI, "the second consecutive monthly reduction in total activity in the euro zone has been observed, amid another decline in new orders," they point out from S
With a "record" accumulation of stock due to not having so many sales, "at the moment we are seeing a decline in production and activity in a wide range of sectors," says Karker, "as the economic weakness continues to spread more and more plus".
The coup was "mainly concentrated in the major economies", especially Germany and France. In the case of Germany, the composite PMI stood at 47.6 points in August from 48.1 in July, which is the worst reading of the data in 26 months. On its side, the French PMI has dropped to 49.8 integers, compared to 51.7 the previous month, at its lowest in a year and a half.
