Uncertainty weighs on euro area PMIs

Business sentiment in the euro area took a turn for the worse in October: The composite Purchasing Managers’ Index (PMI) for the euro area fell sharply from 53.1 to 51.9 points in October. Economists surveyed beforehand had expected a smaller decline. The PMI has thus slipped into a range where the euro area economy has historically grown at only a below-average rate – that is, by less than 0.4% compared with the previous quarter.

The PMI fell particularly sharply in the services sector (from 53.0 to 51.7), while the index in the manufacturing sector declined only slightly (from 52.9 to 52.4). In addition, more companies – particularly in the manufacturing sector – reported rising input prices. This suggests that the renewed rise in energy prices in the wake of the conflict in the Middle East has weighed on sentiment.

For full text see attached PDF-Version.