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The Flash Eurozone PMI Composite Output Index declined for the third consecutive month. However, the contraction moderated from 46.5 to 47.2 on the back of the Flash Services PMI Activity Index rising to 47.8 from 46.4 in October. On the other hand the recession in the Eurozone’s manufacturing sector deepened, with the Flash Eurozone Manufacturing PMI falling to 46.4 from 47.1 in October – the lowest since July 2009.

The situation in France improved significantly, though. While still contracting somewhat the Flash Services Activity Index rose strongly to 49.3 from 44.6 in October but the Flash Manufacturing PMI fell to 47.6 from 48.5, indicating that the contraction in the manufacturing sector is deepening.

Germany’s services sector is gaining momentum as the Flash Services Activity Index jumped to a four-month high of 51.4 from 50.6 in October. However, the contraction in Germany’s manufacturing sector is deepening, with the Flash Germany Manufacturing PMI falling to 47.9 from 49.1 in October.

The GDP-weighted PMI (manufacturing and services combined) that I calculate improved from 46.4 in October to a Flash 47.4 in November but remains in contraction territory.

Sources: Markit; Plexus Asset Management.

The outlook for GDP growth in the Eurozone has worsened. I expect the economy to contract by approximately 1% compared to a year ago.

Sources: Dismal Scientist; Markit; Plexus Asset Management.

The outlook for the first quarter of next year is not rosy either but a lot will depend on business sentiment in Germany. (November’s IFO data will be published on Thursday, 24 November.)

Sources: Dismal Scientist; Markit; Plexus Asset Management.

Source: Eurozone's Private Sector Continues To Contract But At A Slower Rate