The European economy takes a nosedive in the face of the resurgence of the coronavirus pandemic.
Leading indicators of the economy, the PMIs from the IHS Markit institute, published on Friday, confirm a clear deterioration in activity in Europe in September and October.
The composite index fell to 49.4 points for the euro zone in October, the lowest since June, after 50.4 in September.
A number less than 50 means activity is contracting.
The momentum for the recovery, which began in May, therefore faltered sharply at the end of the summer.
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At the heart of this slowdown, the service sector, which accounts for most of the GDP, is in sharp decline.
Activities related to tourism, recreation or culture are hit hard by restrictions imposed by governments to combat the spread of the pandemic.
This deterioration should therefore continue and increase in the coming months.
The only positive sign in this gloomy climate: industry resistance.
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Manufacturing production and orders held up in October.
This sector is less directly affected by partial containments or curfews.
It is also benefiting from the recovery in world trade and the Chinese economy.
This explains the better performance of Germany compared to France, which is more subject to the vagaries of domestic demand.
The Minister of the Economy, Bruno Le Maire, recognized on Friday in our columns that growth would again be negative in the fourth quarter.
A tendency towards recession which should take hold of a good part of Europe.
Germany is in turn caught up by an uncontrolled rise in Covid-19 cases and the industry
"will not be enough to save the general decline in activity,"
HSBC believes.
