A woman wearing a protective mask speaks on the phone in front of a closed down store, as the spread of the coronavirus disease (COVID-19) continues, in London, Britain on July 16, 2020.
HANNAH MCKAY/Reuters
Euro zone economic activity slipped back into decline this month as a second wave of the coronavirus sweeps across the continent, heightening expectations for a double-dip recession, surveys showed on Friday.
Renewed restrictions to control the pandemic forced many businesses in the bloc’s dominant service industry to limit operations, and nearly 90% of economists polled by Reuters this week said there was a high risk the coronavirus resurgence would halt the nascent euro zone economic recovery.
“The euro zone PMI confirms that the second wave of the coronavirus is weighing more and more on the economy. A double-dip in the fourth quarter is becoming more likely at this rate,” said Bert Colijn at ING.
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IHS Markit’s Flash Composite Purchasing Managers’ Index, seen as a good gauge of economic health, fell to 49.4 from September’s final reading of 50.4.
That was below the 50-mark separating growth from contraction and only fractionally better than the 49.3 predicted in a Reuters poll.
That headline PMI was dragged down by the service industry’s PMI, which sank more than expected to 46.2 from 48.0.
“The further decline in the euro zone Composite PMI in October adds to the evidence that the second wave of infections, and the new wave of containment measures, is taking a heavy toll on the economy,” said Jack Allen-Reynolds at Capital Economics.
Friday’s surveys showed the bloc’s economy is running at two speeds, with manufacturing benefiting from strong global demand but services – which make up the bulk of the economy – struggling to remain active as lockdowns force consumers to stay home and businesses to close.
In contrast, in China – where the economy relies much more heavily on manufacturing and where the pandemic is largely under control – the recovery accelerated last quarter as consumers shook off their caution.
Echoing the divide between services and manufacturing, German factories powered ahead this month, while in France activity contracted as a resurgence of the virus hit the euro zone’s second-biggest economy.
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Outside the currency bloc and now outside the European Union, Britain’s economic recovery also lost more momentum as restrictions hit businesses in the hospitality and transport sectors.
European stocks pushed 0.8% higher for their best day in five trading sessions as strong third-quarter results offset the survey data.
WINTER IS COMING
It will likely be a chilling winter for the job market which until now has been shielded by government furlough schemes as the uncertain outlook meant firms reduced headcount for an eighth month.
The composite employment subindex nudged up slightly, but remained in negative territory, while the Reuters poll concluded that the bloc’s jobless rate would not peak for at least six months.
With infection rates and the death toll rising, optimism fell. The services business expectations index dropped to 54.6 from 59.2, its lowest since May when the initial lockdowns were being eased.
A 750 billion euro stimulus plan agreed by the European Union in July to support its suffering economies will be delayed, a senior diplomat said on Thursday, which is also likely to have a negative impact on sentiment.
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Still, factories fared much better than expected. The flash manufacturing PMI climbed to a 26-month high of 54.4 and was far above the median forecast in a Reuters poll.
An index measuring output, which feeds into the composite PMI, rose to its highest since early 2018.
Strong demand for manufactured goods meant factories were also able to increase their prices for the first time since mid-2019, albeit only slightly.
That will provide some relief to policymakers at the European Central Bank as inflation, which they want close to 2%, has been negative for two months.
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TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
