Eurozone private sector activity declines in November

The eurozone’s private sector slowed in November as both manufacturing and services activities contracted.

This marks the first time since January that both sectors have simultaneously recorded a decline in output.

The S&P Global Composite Output Index fell to 48.1 in November, its lowest level since January, down from 50.0 in October. The data revealed a significant drop in new business across European manufacturing and services, with international orders experiencing their steepest decline since late 2023.

Business confidence fell to its lowest point since September 2023, primarily driven by pessimism in Europe’s services sector. European companies continued to reduce employment for the fourth consecutive month in November.

Capacity constraints remained evident in the private sector, with backlogs of work decreasing further.

Input cost inflation rose to its highest level in three months, and producer price growth accelerated compared to October.

European economists expressed concern over these developments, highlighting the weak economic outlook for major eurozone economies such as France and Germany. Political instability has further compounded the uncertainty.

In Germany, the private sector contracted for the second consecutive month, with industrial production remaining weak and services activity declining for the first time in nine months.

France experienced a significant drop in private sector output, with both manufacturing and services contributing to the contraction.

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