Eurozone industrial sector activity fell further than previously thought last month. Euro area manufacturing activity even dropped to its lowest level since the first corona lockdowns in 2020 in October, according to final figures from research firm S&P Global.
This means that a recession in Europe is imminent.
All major economies of the currency bloc, except Ireland, saw the contraction deepen in October, S&P Global reported, based on purchasing managers’ indexes released Wednesday. Spain was hardest hit, closely followed by Germany, the largest economy in the euro area.
The euro-zone manufacturing purchasing managers index, which reflects the level of activity in the sector, fell to 46.4 in October. A decrease to 46.6 was previously reported from 48.4 in September. Anything below 50 indicates contraction, and anything above that indicates growth. Earlier this week, similar data from Asia also showed that factory activity in that region is declining, which means that the global economy appears to be cooling down further.
“The data now clearly indicates that the manufacturing side of the economy is in recession,” S&P Global economist Joe Hayes said. “Factors likely to exacerbate the downturn include inflation, which remains stubbornly high despite ongoing signs of easing supply chain pressures,” Hayes said.
