The pace of economic growth in the euro area slowed to a 16-month low in November, according to the Markit Eurozone PMI®. The headline index, which measures business activity in the manufacturing and services economies, fell from 52.1 in October to 51.4, its lowest since July of last year.
Manufacturing output growth picked up slightly to the highest for four months, but the rate of expansion remained only modest. Growth in the service sector meanwhile eased for a fourth successive month to the weakest since last December.
New orders fell very marginally, declining for the first time since July of last year. Orders fell for a third successive month in manufacturing, dropping at the fastest rate since May of last year, while inflows of new business in the services sector slowed to near-stagnation, registering the smallest rise since August of last year. Overall backlogs of work fell at the fastest rate since June 2013, dropping for a sixth successive month. Levels of work-in-hand were down in both manufacturing and services.
Employment stabilised after falling marginally for the first time in 11 months in October, but firms generally remained reluctant to add to staffing numbers in the face of economic uncertainty and weak demand. Headcounts were stagnant in both manufacturing and services.
Selling prices meanwhile fell again in both manufacturing and services, continuing the trend of falling prices that has been recorded since April 2012, although the rate of decline moderated slightly in November.
France remained a key area of weakness, suffering a drop in business activity for a seventh consecutive month and a further month of job cuts. Although the rates of decline in business activity and employment eased slightly, inflows of new business fell at the fastest rate for almost one-and-a-half years. While the rate of decline in activity in the service sector slowed slightly, the manufacturing downturn gathered momentum.
In Germany, growth of business activity slowed to the weakest since July 2013 amid a stagnation of new orders. November was the first month since June of last year that new orders failed to rise. The rate of job creation consequently slowed to register only a modest increase. Growth waned in both manufacturing and services, with new business trends deteriorating in both sectors. Service sector new business showed the smallest rise since January, while new orders in Germany’s manufacturing sector fell at the fastest rate since December 2012, down for a third successive month.
Elsewhere across the region, the overall rate of expansion slowed marginally. An upturn in manufacturing output growth to the highest for four months was offset by slower growth of activity in the service sector. New business across both sectors showed the smallest rise since last November.