Latest data released by Markit - 5 October 2020
- Composite PMI 50.4 vs 50.1 prelim
The preliminary report can be found here. The slight revision higher was predicated by the better revision to the German report earlier, but the contraction in the services sector highlights the two-paced recovery faced by most countries in the Eurozone.
Overall economic activity is seen grinding towards a halt and if virus developments continue to take a turn for the worse, could threaten the economic recovery in the region towards the closing stages of the year. Markit notes that:
"With the eurozone economy having almost stalled in September, the chances of a renewed downturn in the fourth quarter have clearly risen.
"Spain has been especially hard-hit as rising Covid19 case numbers led to further disruptions to daily life. With the exception of the March-to-May period at the height of the first wave of infections, Spain's service sector contraction in September was the largest recorded since November 2012.
"However, renewed service sector downturns were also recorded in France and Ireland, while a nearstalling was recorded in Germany, underscoring the broad-based geographical spread of the worsening service sector picture. Virus containment measures remained particularly strict in both Spain and Italy during September, and were also tightened in France and Germany.
"Much will depend on whether second waves of virus infections can be controlled, and whether social distancing restrictions can therefore be loosened to allow service sector activity to pick up again.
"Governments will also need to be vigilant in providing timely support to sustain recoveries, alongside increasingly accommodative monetary policy. In terms of the latter, inflationary pressures remained low in September, keeping the door open for loose policy. Any further deterioration of the PMI numbers as we head through the fourth quarter will add further weight to calls for more stimulus."
