German manufacturing and services expanded at the slowest pace in 16 months in November, signaling that growth in Europe’s largest economy will remain sluggish.
A Purchasing Managers Index for both industries unexpectedly declined to 52.1 from 53.9 in October, London-based Markit Economics said today.
While the gauge has been above the 50-point mark that divides expansion from contraction since early last year, the reading was below the median forecast of economists for an increase to 54. Germany’s gross domestic product barely grew in the third quarter after shrinking in the three months through June.
The performance lagged behind a modest euro-area revival that extended from France to Greece, and the Bundesbank said the economy will lack momentum until at least the end of this year. The survey “paints a worrying picture of the underlying health of the German economy,” said Oliver Kolodseike, an economist at Markit.
“The economy may fail again to see any meaningful growth in the fourth quarter.”
The euro gave up earlier gains after the report and was down 0.2 percent at $1.2524 at 9:40 a.m. Frankfurt time. The DAX (DAX) Index of stocks was down 0.1 percent at 9,462.
An index for the services industry fell to 52.1 in November from 54.4 in October, and a gauge of manufacturing declined to 50 from 51.4, according to the report. New business for both industries was unchanged from October, bringing to an end a 16-month expansionary streak.
France, China
In France, manufacturing shrank more than economists forecast in November and demand fell. A euro-area measure of services and manufacturing probably strengthened to 52.3 from 52.1, according to the median forecast of analysts before a report at 10 a.m. Frankfurt time.
Weakness in the euro region’s two largest economies may add to pressure on the European Central Bank to step up its stimulus measures as it battles to revive inflation and growth.
The ECB will start buying asset-backed securities this week as part of stimulus plans that already include covered-bond purchases, long-term loans to banks and record-low interest rates.
ECB President Mario Draghi said this month that officials have been tasked with preparing new measures to be deployed should the outlook worsen.
A Chinese factory gauge published today fell to a six-month low in November, adding to signs broader stimulus is needed to halt a slowdown in the world’s second-largest economy.
The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 50.0, below the median estimate of 50.2 in a Bloomberg News survey and lower than last month’s 50.4.
bloomberg.com
A Purchasing Managers Index for both industries unexpectedly declined to 52.1 from 53.9 in October, London-based Markit Economics said today.
While the gauge has been above the 50-point mark that divides expansion from contraction since early last year, the reading was below the median forecast of economists for an increase to 54. Germany’s gross domestic product barely grew in the third quarter after shrinking in the three months through June.
The performance lagged behind a modest euro-area revival that extended from France to Greece, and the Bundesbank said the economy will lack momentum until at least the end of this year. The survey “paints a worrying picture of the underlying health of the German economy,” said Oliver Kolodseike, an economist at Markit.
“The economy may fail again to see any meaningful growth in the fourth quarter.”
The euro gave up earlier gains after the report and was down 0.2 percent at $1.2524 at 9:40 a.m. Frankfurt time. The DAX (DAX) Index of stocks was down 0.1 percent at 9,462.
An index for the services industry fell to 52.1 in November from 54.4 in October, and a gauge of manufacturing declined to 50 from 51.4, according to the report. New business for both industries was unchanged from October, bringing to an end a 16-month expansionary streak.
France, China
In France, manufacturing shrank more than economists forecast in November and demand fell. A euro-area measure of services and manufacturing probably strengthened to 52.3 from 52.1, according to the median forecast of analysts before a report at 10 a.m. Frankfurt time.
Weakness in the euro region’s two largest economies may add to pressure on the European Central Bank to step up its stimulus measures as it battles to revive inflation and growth.
The ECB will start buying asset-backed securities this week as part of stimulus plans that already include covered-bond purchases, long-term loans to banks and record-low interest rates.
ECB President Mario Draghi said this month that officials have been tasked with preparing new measures to be deployed should the outlook worsen.
A Chinese factory gauge published today fell to a six-month low in November, adding to signs broader stimulus is needed to halt a slowdown in the world’s second-largest economy.
The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 50.0, below the median estimate of 50.2 in a Bloomberg News survey and lower than last month’s 50.4.
bloomberg.com
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