Eurozone PMI report in line with deep contraction in GDP in Q4 – ABN Amro

"The eurozone composite PMI fell to 45.1 in November, down from 50.0 in October," noted ABN Amro Senior Economist Aline Schuiling.

Additional takeaways

"The composite PMI, is an average of the services sector PMI and the output index of the manufacturing PMI, weighted according to their shares in GDP (of around 66% and around 15%, respectively). The decline in the composite PMI was largely due to a sharp drop in the services sector PMI (to 41.3 from 49.6), which reflects that new lockdown measures in the services sector were introduced in all the larger eurozone countries."

"Overall, the PMI report is in line with a deep contraction in eurozone GDP in Q4, as modest growth in manufacturing will be overshadowed by sharp contraction in services. This is consistent with our base line for a double dip recession in the eurozone economy in the current quarter and the first quarter of next year."

"Looking further forward, our conviction in a sharp rebound in economic growth during the course of 2021 has strengthened in recent weeks. Once immunity is in place for key workers and the vulnerable, we expect a significant lifting of restrictions in Q2 and – especially – in Q3."