There has been another indicator that the debt crisis is dragging the euro zone’s economy back into recession as the latest business surveys showed the downturn in manufacturing in the region in October was even deeper than previously thought.
The final Markit Eurozone Manufacturing Purchasing Managers Index, which monitors thousands of euro zone businesses, recorded contraction for the third consecutive month.
German manufacturing activity declined for the first time in just over two years. The country has been the economic engine of the euro zone economy.
Spanish factory activity shrank for a sixth straight month, while conditions in Italy deteriorated much more sharply than expected to a 28-month low. Italy is increasingly the focal point of worry in the euro zone debt crisis.
For the region as a whole, the new orders index fell for the fifth month running, at the fastest rate of decline since May 2009. As a reliable forward-looking indicator, that does not bode well for factory activity in November.
While firms did take on more workers for the 18th consecutive month, hiring was the weakest since June 2010. Euro zone unemployment rose to 10.2 percent in September, nudged up by Spain, where unemployment reached 22.6 percent.