Markit reported that output of the manufacturing and service sectors dropped at the fastest rate since June 2009.
Commenting on the flash PMI data, Chris
Williamson, Chief Economist at Markit said:
“The Eurozone has slid further into decline at the
start of the fourth quarter. The survey is running at
a level which is historically consistent with the
region’s economy contracting at a quarterly rate of
over 0.5%. Official data have shown surprising
resilience over the summer compared to the survey
data, but the underlying business climate has
clearly deteriorated markedly in recent months.
While GDP may decline only modestly in the third
quarter, a steeper fall looks to be on the cards for
the fourth quarter.
“The financial markets may have cheered the
positive developments from policymakers in
seeking to resolve the region’s debt crisis, notably
the promise of bond market intervention by the
ECB, but business appears to have been less
impressed. Sentiment about prospects for the year
ahead are now the gloomiest since early-2009,
when the post-Lehman Brothers crisis was in full
“In addition to worries about the health of domestic
markets, companies are also seeing demand
weaken further afield, notably in Asia and, to a
lesser extent, the US.
“Worries about the outlook have translated into
further job losses, suggesting companies are
moving increasingly into cost-cutting mode. Even
Germany is not immune, with October seeing the
first back-to-back monthly fall in employment since
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