However, business confidence remained gloomy by historical standards, and demand continued to fall at a steep pace, causing job growth to pull back over the month, S&P Global said in a statement.
One benefit of the weaker demand outlook and the easing of supply constraints was the cooling of price pressures, particularly in the manufacturing sector. Business costs rose at the slowest pace in 14 months, which in turn allowed sales price inflation to moderate, although inflation rates remained elevated.
In November, business activity fell in the euro zone for the fifth straight month, S&P Global said. Although the rate of decline was the second strongest since 2013, excluding the lockdown months, the intensity of the recession moderated in response to a reduced rate of new business loss, fewer supply constraints, and a rebound in business confidence for 2023.
The seasonally adjusted S&P Global Eurozone PMI Composite Production Index increased from 47.3 in October to 47.8 in November, according to a preliminary ‘flash’ reading based on about 85 percent of regular survey responses.
The PMI has now registered below the neutral level of 50.0, indicating a drop in business activity levels for five consecutive months, although the latest data indicates a moderation in the rate of contraction.
The PMI data for the fourth quarter so far put the euro zone economy on track for its steepest quarterly contraction since the end of 2012, excluding the months of pandemic lockdown.
The manufacturing sector continued to lead the recession, with factory output falling for the sixth straight month, S&P Global said.
Although the rate of decline in production eased, the latest drop was the second-strongest on record over the past decade if the pandemic peak is excluded.
Within the euro zone, Germany again reported the steepest drop, the composite PMI at 46.4 to record a fifth monthly decline in output in as many months. Although the latest drop was the weakest since August, it was still the third largest since 2009, barring pandemic lockdowns. Germany’s manufacturing sector suffered a marked cooling in the rate of decline.
Production fell in France, the composite PMI registering 48.8 to mark the first drop in business activity since February 2021. Manufacturing output fell for the sixth straight month, though the rate of decline eased to the slowest since August.
Production fell in the rest of the Eurozone for the third month in a row, although November’s drop was the smallest in this sequence.
Meanwhile, new orders for goods and services fell for the fifth straight month, signaling a further sharp decline in demand. Although the loss rate slowed from October, the drop in orders was the second largest seen in the past two years.
While new orders fell at a modest pace in the manufacturing sector, the pace of loss intensified slightly in services. The drop in new orders meant companies were again reliant on existing backlogs to help maintain levels of business activity, causing backorders to fall for the fifth consecutive month, falling at the rate highest in two years.
A particularly steep drop was again recorded in manufacturing, but backlogs also showed a further drop in services.
Fibre2Fashion (DS) News Desk