THE eurozone’s economic slump was a little less pronounced in November than previously thought, according to data released yesterday.
However, there are few signs that the region will emerge from recession soon.
Markit’s Eurozone Composite Purchasing Managers’ Index (PMI), which gauges business activity across thousands of companies, rose in November to 46.5 from 45.7 in October, which is markedly higher than the preliminary reading of 45.8 reported 10 days ago.
However, the PMI has lingered below the 50 mark that divides growth and contraction for all but one of the last 15 months and, with no economic stimulus in the pipeline, there is little reason to expect a rebound.
Survey compiler Markit said there was no single reason for the upward revision to the PMI from the mid-month flash estimate, which could simply be down to a stronger end to the month for businesses.
France, Spain and Italy were the biggest drags on the euro zone economy through last month. Germany performed better.
Overall, however, the survey still pointed to a deepening recession this quarter, following the economy’s 0.1 percent decline in the third quarter.
“The (upward revision) is good news as it might be a sign that activity has bottomed out in Q3,” said Annalisa Piazza, economist at Newedge Strategy in London.
“Nevertheless, we see no signs of improvement that suggest that the EMU economy might recover any time soon.
“Further contraction in GDP remains our baseline scenario at least until Q1 2013.”
The euro hit a seven-week high yesterday and European shares continued their recent rally, although that was mainly due to comments from China’s new leader which boosted expectations for global growth.
Monday’s manufacturing PMIs told a similar story to the composite and services numbers.
The composite new orders index saw a sharp upwards revision to 45.0 from 44.1 in the preliminary data but still showed company order books declining at a fast rate.
Service sector businesses like banks, hotels and restaurants that account for the vast bulk of the euro zone’s private economy, also saw activity decline at the slowest rate in three months.
The final services PMI was revised up a full point from the flash reading, to 46.7 and compared with October’s 46.0.