Data Hints At An Economic Slowdown

Data Hints At An Economic Slowdown

over 3 years ago2 mins

Looks like the eurozone’s recovery could be fading fast: new data out late last week showed business activity dropped to a four-month low 📉

What does this mean?

First, a bit of background: these monthly surveys – which give investors a more up-to-date idea of how the economy is doing than, say, growth data – ask business managers how busy they’ve been compared to the month before, and hand out a score based on what they find. A score of 50 or higher suggests the economy is expanding, while any lower hints at – whisper it – a contraction.

Daily Brief Image

The UK may have managed to keep its head above the 50 mark, but the eurozone wasn’t quite so lucky 🇪🇺 And even though the bloc’s still well above the all-time lows of the first coronavirus wave, the survey’s results do signal the fourth quarter could bring yet more economic shrinkage.

Daily Brief Image

Why should I care?

Dig a little deeper and you’ll find plenty of internal conflict in the data: manufacturing companies have seen growth accelerate thanks to strong global demand, but services – think everything from accountants to the bruised-and-battered hospitality sector – have deteriorated as the pandemic’s reared its ugly head once again 🦠 Cue the US plumping up its feathers: the country released survey data at the end of last week too, and it actually saw activity in the services sector increase.

Funny thing is, European economic data for the third quarter – due at the end of the month – is actually expected to show record growth compared to the quarter before 🤔 But Friday’s survey data has already prompted economists to prepare for the fourth quarter to stagger back into the red. That means Europe could be heading straight into a “double-dip” recession – or two periods of contraction broken up by a brief stint of expansion.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG