The EU’s economic recovery slowed down before the second wave of Covid-19 infection

Business activities of the Eurozone in September were interrupted by the 2nd wave of Covid-19 infection.

Euro symbol in Frankfurt, Germany. Photo: AFP / VNA

The lowest preliminary PMI for the past 3 months

According to preliminary results from a recent survey, the Eurozone Purchasing Managers’ Index (PMI), a general measure of the health of manufacturing and service industries, has hit its lowest level in the past three months, 50.1 points remaining. The PMI index above 50 shows that the surveyed industry / service sector has growth.

Specifically, the Eurozone service sector PMI in September was in a bad state, with service sector activity declining to the lowest level in 4 months, while Eurozone’s manufacturing activities remained in the region. extreme and even hit a 31-month high.

“The two-speed economy is clear, factories (in the Eurozone) recorded growth thanks to the rebound in demand for goods, especially the needs of export markets plus the opening of retail. back in many countries. However, the Eurozone service industry is still sinking in recession as businesses providing direct services to customers are still affected by concerns about an increasing number of Covid-19 cases ”, Mr. Chris Williamson, specializing in chief economist at market data analysis company IHS Markit (UK) said.

The European Center for Disease Prevention and Control said that as of September 22, Eurozone recorded 2.9 million Covid-19 cases, of which Spain and France confirmed more than 10,000 new cases per day. .

The governments in the Eurozone recently announced the introduction of new anti-epidemic measures, and economists have also begun to observe the effects of these measures on the region’s economic performance.

Mr. Williamson said upcoming official data could show that overall Eurozone economic performance has slowed down, which leads to “high risk of double decline” in the Eurozone.

France fell into a recession zone

Manufacturing is somewhat forced but still not strong enough to pull back the deep decline of the French service industries. As reported by IHS Markit, the overall French PMI in September declined for the first time in four months, to 48.5 points, from 51.6 in August.

Meanwhile, despite being strongly supported from manufacturing, Germany’s economic recovery was still slow. Germany’s preliminary PMI in September fell to 53.7 points, from 54.4 in August.

“The main concern now is whether the September’s declines will drag to the fourth quarter of 2020 and bring the recession back up after a disappointing short rally in the third quarter,” said Williamson. .

The above preliminary data makes analysts make very conservative comments on the economic health of the Eurozone in the coming quarters. Experts from the consulting and economic research firm Capital Economics (UK) said that the Eurozone’s PMI in September has reinforced the evidence that the initial recovery of the region has been exhausted. .

The newly applied Covid-19 anti-epidemic blockade can reverse the economic recovery momentum of the Eurozone.

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