PMI signals "weakest Eurozone growth" for more than a year

Emma Haslett
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The figures suggest the eurozone has hit its weakest growth in 16 months (Source: Getty)

The speed of recovery in the Eurozone has slowed down again in November, Markit's Purchasing Managers' Index (PMI), published this morning, suggests

The flash composite index, which measures output in the region, fell to 51.4, its lowest in 16 months, and down from 52.1 in October. The figure is still above the 50 mark, below which it would signal contraction - but growth is clearly anaemic.

Markit said France remained a "key area of weakness", with a drop in business activity for the seventh month in a row and "a further month of job cuts". German business activity also slowed to its weakest since July last year as new orders stagnated.

Howard Archer, chief European and UK economist at IHS Global insight, said the disappointing number "indicates that the Eurozone continues to struggle".

Heightened geopolitical tensions, particularly related to Russia/Ukraine, have weighed down on confidence and investment across the Eurozone, reinforcing ongoing challenging conditions in many countries.

Credit conditions are currently still tight in many countries, unemployment remains elevated and seems likely to creep down at best over the coming months, private and public debt levels are high in a number of countries, while consumer purchasing power is constrained by generally limited wage growth. Meanwhile, the persistent struggles of the French and Italian economies reinforce concerns over their underlying competitiveness and growth potential.

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