Eurozone business activity in slow lane as exports brake

November’s fall in the composite PMI raises doubts about whether the economy will rebound

Jack Allen, Senior economist at Capital Economics

london — Eurozone business growth has been much weaker than expected this month as a slowing global economy and a United States-led trade war have led to a sharp fall in exports, a survey showed on Friday.

The disappointing readings will likely be of concern to policymakers at the European Central Bank who are expected to end their €2.6 trillion asset purchase programme next month.

In Germany, Europe’s largest economy, business growth has slowed to a near four-year low this month, a survey showed earlier, sending the euro down to a day’s low of $1.1365.

France’s private sector also struggled to keep up momentum in November as manufacturing activity softened in the face of falling new orders, a sister survey showed.

IHS Markit’s Flash Composite Purchasing Managers’ Index for the eurozone fell to 52.4, its 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 53.0.

The PMI survey results counter a Reuters poll last week that suggested eurozone growth will bounce back to a faster pace this quarter, allowing the European Central Bank to stop buying bonds next month as planned.

“November’s fall in the composite PMI raises doubts about whether the economy will rebound after a weak third quarter. There’s no wonder the news has been taken badly by the market,” said Jack Allen at Capital Economics. —