Services in Europe Dive Deeper into Recession

• November flash services PMI 41.3 points vs 42.0 expected
• October services were 46.9
• Manufacturing PMI 53.6 points vs 53.3 expected
• October manufacturing was 54.8
• Composite PMI 45.1 points vs 45.6 expected
• October composite PMI was 50.0 points

“The Eurozone economy has plunged back into a severe decline during November, amid renewed efforts to quash the rising tide of COVID-19 infections. The data adds to the likelihood that the Euro area will see another contraction in the GDP in the fourth quarter.

“The service sector has once again been the hardest hit, especially consumer-facing and hospitality businesses, though weakened demand has also taken a toll on manufacturing.

“The factory sector nevertheless remains something of a bright spot, with factories in Germany continuing to show especially encouraging resilience, led by a further surge in demand.

“Firms across both manufacturing and services have also become more optimistic about the year ahead, largely reflecting growing hopes that the recent encouraging news on vaccines will allow life to return to normal in the new year.

“Importantly, however, the further downturn of the economy signalled for the fourth quarter represents a major set-back to the region’s health and it will extend the recovery period. After a 7.4% contraction of GDP in 2020, we are expecting only a 3.7% expansion in 2021.“