Eurozone PMI data ‘points to new recession’ by 0.5%-0.6% in the July to September quarter, tipping it into its second recession in three years, a closely-watched survey suggests. The Markit Flash Eurozone PMI Composite Output Index, which measures new orders in manufacturing and services, was 46.6 in August, compared with 46.5 in July (below 50 indicates contraction). This is the seventh consecutive month of contraction in the eurozone’s private sector.
The eurozone’s economy contracted by 0.2% in the second quarter of the year. A recession is generally defined as two consecutive quarters of negative growth.
Even Germany, the eurozone’s strongest economy, showed an accelerating decline in output, with its Composite Output Index falling to a 38-month low of 47.0, down from 47.5 in July. German blue-chip companies ThyssenKrupp and Opel are reducing working hours because of weaker demand, while Bosch has announced it is negotiating reduced working hours with its workforce. The findings contrast with more positive news relating to Germany’s public finances, which were back in the black for the first six months of the year, according to Destatis, the country’s federal statistics office.
Germany’s public accounts showed a surplus of 8.3bn euros (£6.6bn), about 0.6% of gross domestic product, thanks largely to record low unemployment figures.