The purchasing managers' index for industry and service providers is falling - a recession in the euro zone is becoming increasingly likely. Germany, where the index value is weaker than it has been since the first corona lockdown in spring 2020, has a significant share in this.
The euro zone is heading towards a recession, partly because of the weakness of its largest economy, Germany. The purchasing managers' index for the private sector - industry and service providers together - fell by 1.0 to 47.1 points in October, according to the financial services provider S
"In view of the intensified decline in production and the continued decline in demand, economic output in the euro zone is likely to shrink in the fourth quarter of 2022," said S
The service sector in particular will feel this with full force. However, industry in the eurozone was hit even worse in October: Here, the fifth decline in production in a row was as severe as in the past ten years only during the first months of the pandemic. Only the areas of technology, industry-related service providers and pharmaceuticals reported growth this time
Export-dependent Germany is in a particularly bad position. Here, the purchasing managers' index for the private sector fell by 1.6 to 44.1 points, the lowest level since the first corona lockdowns in early 2020. "The signs of an impending recession in the largest economy in the euro zone have increased," said the company S
"The strong price pressure, rising interest rates and customers' increasing reluctance to spend due to fears of recession ensured that incoming orders in industry and the service sector each showed the highest minus since May 2020," emphasized the experts with a view to Germany.
The European Central Bank (ECB) is putting the weakening economy in a quandary. Because of the record inflation, it is likely to raise its key interest rate again sharply on Thursday - for the second time in a row by 0.75 points to 2.0 percent. This means that borrowing costs are likely to continue to rise, which could put additional strain on the economy.
