The French and German economies had a poor start to the fourth quarter due to sustained contraction in private sector activity, weak demand, and rising borrowing costs. According to business survey data from S&P Global in these two countries, the PMI is still far below the level of 50, which is the watershed between economic expansion and non expansion. In October, both the manufacturing and service industries experienced a contraction in PMI, while the labor market, which had previously been one of the few bright spots, also experienced further weakness.
The initial PMI of the Markit manufacturing industry in France in October was 42.6, the initial PMI of the Markit service industry was 46.1, and the initial PMI of the Markit comprehensive industry was 45.3; The initial PMI for the Markit manufacturing industry in Germany in October was 40.7, the initial PMI for the Markit service industry was 48, and the initial PMI for the Markit comprehensive industry was 45.8.
In addition, the euro weakened against the US dollar, falling 0.1% at one point to 1.0660. Bonds maintained their earlier gains, and the yield of 10-year German treasury bond fell sharply by 8 basis points to 2.79%.
Cyrus de la Rubia, Chief Economist of Hamburg Commercial Bank, said that these data indicate that Germany is once again in a recession and confirm the widespread belief that Germany will also experience negative growth for the entire year.
In a statement on Tuesday, he said, "Germany performed poorly in the last quarter. Manufacturing output continued to sharply decline, and the service sector activity that increased last month also turned into contraction again
The region's economy is facing multiple unfavorable factors, including the European Central Bank's interest rate hike and a slowdown in global economic activity. The rise in energy prices caused by the Middle East conflict may exacerbate its difficulties.
S& According to data from P Global, the pace of layoffs among German companies accelerated in October, following the first layoffs in nearly three years last month.
In France, due to sluggish demand, the contraction rate of manufacturing economic activity has accelerated, and the industry's expected index has dropped to its lowest level in three and a half years, indicating a "bleak outlook". The service industry has also encountered obstacles due to a decrease in new orders.
Meanwhile, pricing data from France shows that it is too early for European Central Bank officials to announce a victory over inflation.
Norman Liebke, an economist at Hamburg Commercial Bank, said: "The price index is in a dangerous situation. The rate of increase in input prices has been rising for the second consecutive month due to rising fuel prices and ongoing wage pressures