A recent analysis warned that the Eurozone is currently experiencing a recession due to drastically decreased manufacturing output, with France seeing its lowest point in over three years.
Dr Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank (HCOB), said what he called a “relentless slump” spells a “bleak picture”.
Furthermore, he asserted that the third quarter of last year saw the monetary union enter a recession.
According to the HCOB Eurozone Manufacturing Purchasing Managers’ Index (PMI) survey, as of the end of 2023, the industry “remained stuck in contraction,” with output declining and factory job losses stretching into a seventh consecutive month.
The monthly analysis, compiled by S&P Global, is based on responses to questionnaires sent to survey panels of manufacturers in Germany, France, Italy, Spain, the Netherlands, Austria, Ireland and Greece, totalling around 3,000 private sector companies.
Performance is measured using responses on a scale of one to 100; the greater the better.
Greece’s 51.3 is the highest in the last four months; nonetheless, the figures for all other countries are below 50, including Ireland (489.9), Spain (46) Italy (45.3), Netherlands (44.8), Germany (43.3), France (42.1), and Austria (42.0).
The 19-member eurozone as a whole has a rating of 44.4, while the value for France is at a 43-month low.
Dr. de la Rubia noted that an increasing number of businesses were expressing optimism about their output for the upcoming year, probably as a result of their perception of a potential interest rate reduction.
However, referring to Germany, France, Italy and Spain, he continued: “As for the top four eurozone economies, December’s ranking by manufacturing sector performance made for ugly reading.
“The least ugly was Spain – Here the PMI is signalling a fall of economic activity that is less pronounced than in Italy, whose industry, in turn, is shrinking at a slower pace than Germany’s.
“France is carrying the red lantern.”
Due to the weak eurozone, Britain’s economy is expected to surpass Germany’s in the next years, according to UBS economists’ predictions last week.