Euro-area manufacturing and services expanded less than expected in November, adding pressure to the European Central Bank to boost stimulus.
Markit Economics reported that its composite Purchasing Managers Index plunged to 51.1 last month, compared with October’s reading of 52.1. This is the lowest figure in 16 months and shows the economic growth may be 0.1 percent in the fourth quarter.
ECB Governing Council is due to meet tomorrow to discuss various proposals on how to boost growth and inflation.
“The survey results indicate that policy initiatives currently announced have yet to have a meaningful impact on business or consumer confidence,” Chris Williamson, a chief economist at Markit, told Bloomberg News. “More aggressive measures are likely to be needed.”
The report pushed the euro to its lowest level in two years, causing it to trade at $1.2333 as of 11:59 a.m. in Frankfurt.
The index for the services sector dropped to 51.1 this month, compared with 52.3 in October. The index of factory activity fell to 50.1 against the expected reading of 50.4, reported Markit on Dec. 1
France posted the weakest results across the region, with a composite index of 47.9, down from 48.2. Growth in Germany was the weakest in 17 months, while in Spain; it was the lowest in nine months. Italy posted slight growth, reported Markit.
Falling energy prices have negatively impacted growth in the euro area, something that will be worsened by last week’s decision by the Organization of Petroleum Exporting Countries to leave output unchanged. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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