Investing.com – Manufacturing activity in the euro zone fell more-than-expected in October, falling to the lowest level since July 2009, preliminary data showed on Monday.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index fell to a seasonally adjusted 47.3 in October, down from 48.1 in September.
Analysts had expected the index to decline to 48.1 in October.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The report showed that service sector activity in the euro zone fell more-than-expected, dropping to a 27-month low in October.
The preliminary services purchasing managers’ index fell to a seasonally adjusted 47.2 in October compared to a reading of 48.8 in September. Analysts had expected the index to ease down to 48.5.
Output across both manufacturing and services fell in France for the first time since July 2009. Meanwhile, the rest of the euro zone contracted for the fifth successive month, with the rate of decline of output accelerating to the fastest since June 2009.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The PMI signals a heightened risk of the euro zone sliding back into recession.”
“Furthermore, it is not only the periphery that is contracting. France saw a fall in private sector output for the first time in over two years, led by a worryingly steep deterioration in the service sector. Meanwhile, German manufacturing – the spearhead of the region’s recovery – is now also in decline,” he added.
Following the release of the data, the euro remained fractionally higher against the U.S. dollar, with EUR/USD easing up 0.04% to trade at 1.3901.
Meanwhile, European stock markets were up after the open. The EURO STOXX 50 advanced 0.7%, France’s CAC 40 rose 0.6%, the FTSE 100 added 0.7%, while Germany's DAX jumped 1.1%.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index fell to a seasonally adjusted 47.3 in October, down from 48.1 in September.
Analysts had expected the index to decline to 48.1 in October.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The report showed that service sector activity in the euro zone fell more-than-expected, dropping to a 27-month low in October.
The preliminary services purchasing managers’ index fell to a seasonally adjusted 47.2 in October compared to a reading of 48.8 in September. Analysts had expected the index to ease down to 48.5.
Output across both manufacturing and services fell in France for the first time since July 2009. Meanwhile, the rest of the euro zone contracted for the fifth successive month, with the rate of decline of output accelerating to the fastest since June 2009.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The PMI signals a heightened risk of the euro zone sliding back into recession.”
“Furthermore, it is not only the periphery that is contracting. France saw a fall in private sector output for the first time in over two years, led by a worryingly steep deterioration in the service sector. Meanwhile, German manufacturing – the spearhead of the region’s recovery – is now also in decline,” he added.
Following the release of the data, the euro remained fractionally higher against the U.S. dollar, with EUR/USD easing up 0.04% to trade at 1.3901.
Meanwhile, European stock markets were up after the open. The EURO STOXX 50 advanced 0.7%, France’s CAC 40 rose 0.6%, the FTSE 100 added 0.7%, while Germany's DAX jumped 1.1%.