France and Germany are leading the eurozone towards an economic slowdown, with recent data indicating that business activity in the region has hit a three-year low.
The eurozone might be on the brink of a recession as recent figures indicate a three-year low in business activity across the member countries.
October’s PMI, as reported by S&P Global, plummeted to 46.5, notably below the pivotal 50 mark that differentiates growth from decline, marking its most dismal level since November 2020.
If we exclude the months affected by Covid, this is the most severe dip since March 2013.
Factors such as escalating interest rates, a decelerating global economy, and the looming threat of an energy crisis influenced by Middle Eastern conflicts are negatively impacting the situation. Market experts are now cautioning about a potential recession in the eurozone.
Hamburg Commercial Bank’s chief economist, Cyrus de la Rubia, commented, “The eurozone’s economic conditions are deteriorating. It won’t surprise us if we witness a soft recession in the eurozone later this year, marked by two successive quarters of declining growth.”
On a related note, the UK’s service sector PMI dropped to 49.2 in October, which is its lowest since January, marking the third straight month of decline.
