Euro zone business activity shrinks

Vaccine hopes may have given Europe a boost on Monday (Nov 23)

But fresh economic data showed the damage being done in the euro zone.

Business activity contracted sharply this month amid renewed lockdowns that have hammered the bloc's dominant services industry.

The sector in Germany, Europe's largest economy, contracted faster this month

While other surveys showed that in France the economy shrank at the fastest pace since May.

A PMI covering the euro zone's service industry fell to 41.3, its weakest reading since the height of the first wave of the pandemic.

The bloc's economy is on track for its first double-dip recession in nearly a decade..

IHS Markit's headline flash composite PMI, seen as a good guide to economic health, fell to 45.1 in November.

That was from October's 50 - the level separating growth from contraction.

However, manufacturing has fared better as many factories have remained open.

Its flash PMI held well above the breakeven mark at 53.6 in November.

And with vaccines looking increasingly likely to be rolled out in the first half of next year, the surveys show greater optimism about 2021.

Britain, which is outside the euro zone and European Union took a major hit to its huge services sector.

Bank of England Chief Economist Andy Haldane said on Monday he hoped the economy would be "turning a leaf" next year.

But warned that some long-term damage was inevitable.

Video Transcript

- Vaccine hopes may have given Europe a boost on Monday, but fresh economic data showed the damage being done in the Eurozone. Business activity contracted sharply this month amid renewed lockdowns that have hammered the bloc's dominant services industry. The sector in Germany, Europe's largest economy, contracted faster this month, while other surveys showed that in France the economy shrank at the fastest pace since May.

A PMI covering the Eurozone service industry fell to 41.3, its weakest reading since the height of the first wave of the pandemic. The bloc's economy is on track for its first double dip recession in nearly a decade. IHS market's headline flash composite PMI, seen as a good guide to economic health, fell to 45.1 in November. That was from October's 50, the levels separating growth from contraction.

Manufacturing, though, has fared better as many factories have remained open. Its flash PMI held well above the break even mark at 53.6 in November. And with vaccines looking increasingly likely to be rolled out in the first half of the year, the surveys show greater optimism about 2021.

Britain, which is outside the Eurozone and European Union, took a major hit to its huge services sector. Bank of England chief economist Andy Haldane said on Monday, he hoped the economy would be turning a leaf next year. But warned that some long term damage was inevitable.