Eurozone business activity at three-year low
[ad_1]
The economic sentiment indicator (ESI) in the euro area dropped to 93.3 points in September (forecast – 92.5) from 93.6 points (revised value) in August, according to data from the European Commission. This is the minimum since November 2020. In the EU countries as a whole, the indicator dropped to 92.8 points in September from 93.2 in August. Let us remind you that the indicator is calculated based on the results of surveys of representatives of industry, services, retail, the construction sector and consumers. The 100 point mark (the average indicator value in 2000–2022) separates the growth of business activity from its contraction. The continued decline in the indicator is explained by the tightening of ECB policy (see Kommersant on September 15) and persistent inflationary pressure. Let us note that there is no data on European inflation in September yet; in August, as in July, in the euro area it was 5.3%.
In the largest economies of Europe, the ESI index also remains in the negative zone. In France, the figure, however, increased slightly – to 95.9 points from 93.2 in August. In Germany, the indicator remained relatively stable: plus 0.3 points in September, to 89 points. In Spain and Italy, where an increase in business activity was previously recorded, ESI in September, on the contrary, went negative: 99 points against 102.2 points a month earlier in Spain and 97.9 against 100.1 in Italy.
The Employment Expectations Indicator (EEI), which has fallen continuously since February, rose 0.6 points in September to 102.4 points due to more optimistic employment expectations in the services sector. In industry and retail trade, expectations remained generally stable in September, while in construction they continued to deteriorate. It should be noted that similar sentiments were previously recorded in S&P Global when publishing the September PMI. Remaining in the negative zone (below 50 points), in the services sector the purchasing managers’ index increased to 48.4 points (47.9 in August), and in industry it decreased to 43.4 (from 43.5).
The ECB’s rhetoric, despite statistical data and leading indicators, remains the same: monetary policy will be tough in the near future. While Europe continues to record a weakening of business activity and predict the possible consequences of further cooling, in the Russian Federation they actually recognize the “overheating” of the economy and expect it to persist at least for the next year (for more details, see Kommersant on August 31 and September 19).
[ad_2]
Source link
