Business activity in the euro area witnessed a sharp contraction during the month of November due to the negative impact of the Covid-19 closure restrictions, which prompted many service companies to temporarily close, pushing business activity in general to decline.
The composite PMI including both manufacturing and services sectors in the eurozone contracted in November by registering 45.1, compared to October’s reading of 50, while expectations indicated a contraction of 46.1.
On the other hand, the PMI for the services sector in the euro zone showed another contraction of 41.3 from a previous contraction of 46.9, and expectations were for a reading of 43.7. The manufacturing sector registered a growth of 53.6, less than the previous reading of 54.8 and expectations of 53.6.
The eurozone economy slid again into a sharp deterioration in November amid renewed efforts to confront the growing infections from the coronavirus, as expectations indicate that the eurozone economy is on its way towards experiencing the first double recession in nearly a decade.
With weak domestic and global demand, despite price cuts and diminishing business backlog, companies cut staff for a ninth month. The employment index in the services sector decreased to 48.1 from 48.5.
As for the levels of the euro, it was able to rise today despite the weak data, taking advantage of the dollar's weakness against the major currencies, with increasing optimism in the markets about obtaining Covid-19 vaccines at early dates.
The euro against the dollar rose today, reaching its highest level at 1.1882, after opening the day's trading at the level of 1.1856.