Do New Data Suggest that Europe’s Recovery Is in Peril?
Values from a key indicator show that Europe’s economies are on course to expand in October, though not quite at the rates seen in September.
Calculations of Markit’s Flash Purchasing Managers’ Index shed light on the levels of economic activity in the eurozone. The overall index registered a flash value of 51.5 in October, down from 52.2 the month before. While the decline from September to October is certainly not something that economists want to see, there is still some good news in the figure: Numbers above 50 represent movement in a positive direction — toward economic expansion — meaning that the economies of the eurozone may continue to expand this month.
Markit also calculates scores for both the services and manufacturing sectors. The flash PMI for services was 50.9, down from September’s value of 52, while the flash PMI for manufacturing posted a modest gain, up to 51.3. This is good news for those who would attribute the slowdown from September to October as a manifestation of natural variance, because the manufacturing figure is often more indicative of longer-term trends than the services number.