Euro-area manufacturing activity sank to the lowest level since the first Covid-19 lockdowns in 2020 as record inflation and a weakening global economy erode demand for goods.
All of the currency bloc's biggest economies except Ireland saw the downturn deepen in October, according to surveys of purchasing managers by S&P Global published on Wednesday (Nov 2). Spain was the worst hit, followed closely by Germany, which is among the most exposed to Russia's cut in energy supplies.
The data "are now clearly signalling that the manufacturing economy is in a recession," S&P Global economist Joe Hayes said in a statement. "Factors that are likely to aggravate the downturn include inflation, which remains stubbornly elevated despite continued evidence that supply-chain pressures are receding."
Surveys in Asia this week showed factory activity slowing there too, adding to evidence that the world economy is cooling. The 19-nation euro area is predicted to slip into recession amid surging energy prices and uncertainty stoked by Russia's war in Ukraine, even after it remained surprisingly resilient in the three months through September. BLOOMBERG