Eurozone November growth below par

Eurozone business growth was much weaker than expected this month as exports fell sharply, hurt by a slowing global economy and an ongoing US-led trade war, a survey showed yesterday.

The disappointing readings will likely be of concern to policymakers at the European Central Bank (ECB) who are expected to draw a line under their €2.6 trillion (Dh9.55 trillion) asset purchase programme at the end of the year.

IHS Markit’s Flash Composite Purchasing Managers’ Index fell to 52.4, lowest since late 2014, from a final October reading of 53.1, missing the median expectation in a Reuters poll for a modest dip to 53. The lowest forecast was for 52.3. Anything above 50 in the survey, which is regarded as a good guide to economic health, indicates growth.

“This is a symptom of slowing global demand — manufacturing is leading the slowdown. The trade war was widely cited,” said Chris Williamson, chief business economist, IHS Markit.

Optimism down

An index measuring new export business, which includes trade within member countries, fell from October’s 49.2 to 48.9, the lowest since IHS Markit started collecting the data in September 2014.

The PMI survey contradicts a Reuters poll last week that suggested Eurozone growth will bounce back to a faster pace this quarter.

With no sign of an end to the trade war between the United States and China in sight — something already hitting export-sensitive economies like Germany — optimism took a hit. Business expectations index fell to 60.3 from 62.1, its lowest in almost four years.