Eurozone Economy Heads For Double-Dip Recession

Following what were stringent coronavirus lockdowns enveloping Europe for much of the spring months, the ensuing economic recovery showed some hopeful gains as the virus began to dissipate over the summer. However, a sudden, and largely anticipated resurgence of the pandemic resurfaced following the summer calm, threatening to unwind any economic gains in the eurozone area.

According to the latest IHS Markit Composite Purchasing Managers’ Index reading, which provides a gauge of economic health, the index dropped from 50.4 to 50 in September, suggesting that the 19-country bloc may be headed for some dark times ahead. The 50 mark, which stands between economic contraction and growth, was largely offset by the services PMI, which dropped from 48 to 46.9– the lowest reading since May.

IHS Markit chief business economist Chris Williamson noted that Europe’s service providers have been hit significantly harder amid the pandemic, mostly as a result of subdued demand in the hospitality sector. This in turn has dragged down the rise in manufacturing, which posted an optimistic increase in September. However, now that the lockdowns are once again being imposed across much of Europe in wake of the second, more severe coronavirus wave, what was once a positive hope of a steady economic recovery for the euro zone is beginning to fade.

According to official data, the euro zone economy contracted by 12.7% in the second quarter compared to the same period only a year ago. In the meantime, IHS Markit noted that its business expectations index fell from 59.2 to 54.2, after already remaining lower than expected throughout the year, as well as the prior two financial crises. In order to contain the likely economic fallout, last week, the the European Central Bank said that it will unveil a new set of monetary actions.

Information for this briefing was found via IHS Markit and Eurostat. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Tariffs Spark New Race for Critical Metals | Rob McEwen

Antimony Resources: The Bald Hill Project

They Laughed at $3,000 Gold, Now We’re Headed for $4,000! | Sean Roosen – Osisko Development Corp.

Recommended

Steadright Begins Preliminary Economic Assessment On TitanBeach Project

Three Miners Trapped Underground At Newmont’s Red Chris Mine

Related News

US Weekly Jobless Claims Continue Increasing, Pelosi Proposes Trillions More Dollars In Next COVID Relief Bill

Despite the maximum pressure to get the US through the recovery phase as quickly as...

Saturday, July 11, 2020, 10:30:00 AM

EU Proposes Tighter Regulations on Cryptocurrency Transfers

Cryptocurrency transactions made in the European Union may soon be subject to tighter regulatory oversight,...

Wednesday, July 21, 2021, 08:00:05 AM

April New Vehicle Sales Lowest Since 1990’s

Edmunds, which serves as an online resource for automotive information, recently published data on new...

Sunday, May 3, 2020, 10:04:00 AM

The Copper Shortage No One Is Talking About

The world’s largest mining companies and metal traders are warning that a massive shortfall of...

Friday, February 3, 2023, 07:36:00 AM

IATA Updates Projected Revenue Loss to $314 Billion for Global Airlines

The International Air Transport Association (IATA) has issued a statement, addressing the current aircraft grounding...

Tuesday, April 14, 2020, 06:47:32 PM