Euro Zone Business Activity Expands Despite Attacks

Manufacturing and services output in the euro zone rose above expectations in November, according to flash figures from Markit, despite the series of terror attacks in Paris earlier this month.

The composite purchasing manager’s index (PMI) came in at 54.4, up from 53.9 in October and above expectations for a reading of 53.9 from analysts polled by Reuters. The 50-point mark separates expansion from contraction and the index this month indicated the fastest rate of expansion of output since May 2011.

Markit’s Chief Economist, Chris Williamson, said the latest figures show “a welcome acceleration of euro zone growth, putting the region on course for one of its best quarterly performances over the past four-and-a-half years.”
He said the data was all that more impressive given terrorist attacks on November 13 in Paris in which 129 people died which, he said, also “subdued economic activity in France – especially in the service sector.”

Earlier preliminary data from Markit showed a continuation of a positive trend in the euro zone’s largest economy Germany where the composite PMI rose to 54.9 in November, up from October’s final reading of 54.2. The 50-point mark separates expansion from contraction.

By contrast, France’s flash composite PMI disappointed by coming in at 51.3, down from 52.6 in October, with services activity weakening. However, the manufacturing survey rose to 50.8, the highest point since April 2014.

Markit Senior Economist Jack Kennedy said a key reason for the slowdown in services growth was due to the November 13 attacks in Paris by the terrorist group that calls itself Islamic State.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.