The Eurozone’s economic downturn deepened in September, with business activity contracting for a third consecutive month, a new survey by S&P Global showed.
The report found that manufacturers across the 19-country union were hit hard by skyrocketing energy costs, with the purchasing managers index (PMI) sinking to its lowest level since 2013. The PMI, which is seen as a good gauge of overall economic health, fell from 48.9 in August to 48.2 in September.
Surging energy prices and the rising cost of living are “not only hitting demand but also limiting manufacturing production and service-sector activity in some cases,” S&P Global economist Chris Williamson said in a statement seen by Bloomberg.
“A Eurozone recession is on the cards,” Williamson warned, noting “Germany is facing the toughest conditions, with the economy deteriorating at a rate not seen outside of the pandemic since the global financial crisis.”
Overall demand in the Eurozone plunged to its lowest mark since November 2020, when the continent was in the grips of the second wave of the Covid pandemic. The business expectations index also declined, slipping to 53.8 from last month’s 56.6, its lowest reading since May 2020.
S&P Global expects the euro area’s economy to shrink by 0.1% in the third quarter.
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