Eurozone output almost stalled in November: survey

Brussels

THE eurozone's economy is seen to have "near-stalled" in November after successive months of manufacturing decline, according to a closely watched survey by the firm IHS Markit.

"Expectations about future output remained well below levels seen earlier in the year, reflecting heighted geopolitical uncertainty, including Brexit, trade wars and auto tariffs, plus general concerns about slowing demand," it said.

IHS Markit said its composite eurozone PMI, a key business indicator, fell to 50.3 points in November, down from a revised 50.6 points last month.

A reading above 50 points points to an expansion. The index's decline showed business sentiment remained just over the threshold into positive territory.

Manufacturing orders have slipped for three straight months, and employment growth had fallen to its lowest point in nearly five years, the firm said in a statement. The latest indicator was "the second-smallest expansion of output across manufacturing and services since the current upturn began in July 2013," it added.

The latest survey came out the same day that the new head of the European Central Bank, Christine Lagarde, urged European countries to back up the ECB's efforts to shore up eurozone growth.

The countries need to "innovate and invest" more in support of the ECB's deployment of cheap credit, record-low interest rates and massive bond purchases, she said in her first speech since taking up the job.

The eurozone, which counts 19 EU countries, registered feeble growth of 0.2 per cent in the third quarter according to official Eurostat figures.

Economic activity was weighed down by sluggishness in Europe's export powerhouse Germany, which only just dodged a recession by recording 0.1 per cent growth in the same period.

IHS Markit said in its statement that German business activity fell for the third successive month and that, "although the rate of decline eased very slightly again, the fourth quarter so far is the worst since the third quarter of 2012".

France, the eurozone's second-biggest economy, "again outperformed Germany," it noted. Its "fourth quarter is so far looking the strongest of the year to date".

"Tentative signs of life in the core eurozone countries of France and Germany are welcome news, as is an easing in the manufacturing downturn," IHS Markit's chief economist Chris Williamson said. "But a fresh concern is that the rest of the region has slipped into decline for the first time since 2013. Manufacturing remains in its deepest downturn for six years amid ongoing trade woes." AFP