More bad news from the European economy. After the unemployment and manufacturing PMI data, we now know the services PMI. It’s worse than expected.
Economists are seriously considering the condition of European economies. Further data indicate that the situation in the European Union is worse than previously assumed. The data diverges from the predictions of experts.
A black scenario for the European Union is coming true
The authorities of the European Union and the European Central Bank have a serious problem. Member States’ economies, on average, are starting to contract. The specter of recession hangs over the entire community.
So far, there have been mainly two rather disturbing statistics. The first concerned unemployment. Here, Poland was one of the most positively distinguished countries, but in some parts of the EU, these data were very worrying.
The seasonally adjusted unemployment rate in the euro area was 6.4%. in June 2023, the same as the month before, the EU statistical office Eurostat reported. The recorded indicator was slightly lower than experts’ predictions. The market consensus was 6.5%.
An even better reading was recorded across the European Union. This indicator amounted to 5.9 percent. in June against 5.9 percent. a month earlier. Countries that do not belong to the euro area contributed to the lower level of unemployment in the whole Community. Among them, Poland may be one of the leaders and role models.
The second issue was the manufacturing PMI, which was below 50. This is important because the PMI methodology assumes that 50 is the starting point. Anything above 50 indicates growth in the sector, anything below indicates collapse.
Services shared the fate of industry
The latest data shows that the services PMI also dipped below the 50 mark. This means that some of the last positive signals from the market have just disappeared. Experts expected that the reading of the index prepared by S&P Global would reach 50.5 points, i.e. it would remain slightly in the black. However, the reality turned out to be different.
In August, the services PMI index amounted to 48.3 points, which is much lower than predicted by the market consensus and much lower than a month earlier, when the result was 50.9. This is another signal to believe that the EU economy is approaching recession.