“C’est la vie”, the body language of Mr Moscovici says in this photo. Hopefully he plans a better “vie” for the Eurozone and the Europeans. Press point after the hearing of Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs (EP Audiovisual Services, 02/10/2014)
It was last Wednesday when the financial information services company Markit published the Markit Eurozone Composite Purchasing Managers Index (PMI) for the month of November. This indicator revealed a weak growth outlook for the 18-country Eurozone while the disappointment of investors was apparent.
November’s Eurozone economic growth
The downslope of Eurozone’s growth continued in November according to PMI’s estimates. The figures of this index showed that this is due to fact that almost no new job and business opportunities were created.
More specifically, the PMI Composite output index was at 51.1 in November, 1 and 0.3 below October’s and flash’s estimates, respectively. Even though it implies expansion for the Eurozone economy, the fact that it has dropped and it is close to 50.0 (borderline that distinguishes contraction from expansion) indicates serious concerns.
Concerns that were highlighted also by Chris Williamson, Chief executive at Markit who stated that: “The final Eurozone PMI came in even weaker than the earlier flash estimate, signaling the weakest pace of expansion since July of last year. The survey data suggest the region is on course to see a mere 0.1% GDP growth in the final quarter of the year, with a strong likelihood of the near-stagnation turning to renewed contraction in the New Year unless demand shows signs of reviving.”
National’s PMI
Among the Eurozone countries, France was the one that had a greatly negative impact on growth. France’s output growth was calculated at 47.9; thus showing a recession for the economy. Furthermore, the business activity of the second biggest economy in Europe dropped both in the manufacturing and services sectors.
On the other hand, Ireland was ranked at 59.9 providing a boost to the overall index estimate. Germany and Spain added to the current Eurozone situation but not to national level since their rates of increase were at 17-month and 9-month lows, respectively. Last but not least, November was a lot better in terms of output growth for Italy compared to October.
Job opportunities at stake
The problem of unemployment is still plaguing Europe and is addressing every age with no discrimination. The PMI surveys revealed that there were not new opportunities in the job market with a slight increase at both the manufacturing and services sectors.
This is daunting if we put ourselves in the shoes of unemployed people. This issue must be fought at all costs if we want to see some potential growth anytime soon. There should be immediate measures implemented in countries such as France and Italy which had a further overall employment decrease according to Markit survey.
Eurozone’s future
What is going to be the next day for Europe? It has been repeatedly stated that the Old Continent is in danger of a probable recession since its leaders cannot seem to stimulate growth. Let’s hope that the European Central Bank (ECB) and every national government separately will find a way to prevent things from getting worse and worse.
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