According to the flash report from HCOB, business activity in the private sector of the eurozone unexpectedly contracted in November, and reached a 10-month low. Companies continued to face challenges securing new orders, which decreased for the sixth month running and at a solid pace. Meanwhile, confidence in the outlook for output dropped to the lowest for just over a year.
The eurozone composite PMI output index fell in November to 48.1 points from 50.0 points in October. An index value below 50 points indicates a reduction in activity in the sector. Economists had expected the index to be 50.0 points. The services PMI fell to 49.2 (10-month low) from 51.6 in October, while the manufacturing PMI declined to 45.2 points (2-month low) from 46.0 points. Economists had expected the services PMI to remain at 51.6 points and the manufacturing PMI to be 46.0 points.
HCOB said that new orders in the private sector fell again in November, and at the fastest pace in 2024 so far. Sharper reductions in new business were seen across both manufacturing and services. Meanwhile, new export orders also declined to the largest extent since the end of last year. New export orders were down sharply, and to a greater degree than seen for total new business. The data also pointed to the 4th monthly decline in employment in the private sector, although the rate of job cuts was only marginal and softer than seen in October. Staffing levels fell in Germany, but rose in France and in the rest of the Eurozone. Companies also continued to deplete backdogs of work in October. Moreover, the latest solid reduction in outstanding business was the most marked since January. As for the inflationary situation, the rate of input cost inflation quickened to a three-month high in November, but was still slower than the average over 2024 so far. Output prices also rose at a pace that was faster than in October but softer than on average across the opening 11 months of the year. Business sentiment was the lowest since September 2023. The overall loss of confidence was centered on the service sector, where optimism fell to a two-year low.