Latest data released by Markit - 4 November 2020
- Composite PMI 50.0 vs 49.4 prelim
The preliminary report can be found here. Business activity in the euro area stagnated last month on the back of a two-paced economy, with the manufacturing sector holding up - largely due to Germany - while services activity slumped.
The resurgence of the virus in the region is the main detriment to start Q4 and amid tighter restrictions being introduced over the past two weeks, the economic outlook going into the year-end doesn't look good.
All in all, this just builds more support for the ECB to ease further next month.
Markit notes that:
"The eurozone's economic recovery stalled in October as containment measures were stepped up to fight second waves of COVID-19 infections. Service providers have been hit especially hard, led by intensifying weakness in consumer-facing sectors such as hospitality, offsetting the brighter news seen in manufacturing during the month.
"Optimism about the future also slumped sharply lower, sliding to the gloomiest since May as companies grew more anxious about the damaging impact of second waves of infections.
"With lockdown measures being tightened, it is becoming increasingly hard to see how the eurozone economy will avoid falling back into decline, especially as some countries, including France, Italy and Spain, are already contracting again.
"Only in Germany has the strength of the manufacturing sector countered the renewed downturn in service sector activity, leading to increasingly polarised economic trends among the euro area's member states. However, for all countries the outlook has grown increasingly dark."
