Euro-PMIs: Stagnation at precarious level

The composite Purchasing Managers' Index for the manufacturing and services sectors in the area rose slightly in October. The index rose from 49.6 to 49.7, which is in line with the average expectations of the economists surveyed in advance. The index for France fell significantly (from 48.6 to 47.3), but a surprisingly positive development in Germany (from 47.5 to 48.4) compensated for this. The indicator for Germany has thus halted its downward trend, having previously fallen four times in a row.

In the euro area as a whole, sentiment has deteriorated slightly in the services sector (from 51.4 to 51.2) and improved in manufacturing (from 45.0 to 45.9) (Table 1). The indicator for the economy as a whole thus remains at the edge of the range in which the economy has contracted in the past.

This does not bode well for the euro area economy in the fourth quarter. The ECB's falling key interest rates are clearly not yet having a positive effect. On the contrary, the previous interest rate hikes are still having an impact. In addition, consumer sentiment is only moving sideways despite higher real wages.

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