Euro zone manufacturing activity drops sharply in October

As per the latest Purchasing Managers Index (PMI) data, euro zone manufacturing activity dropped sharply in October; increased the fear of another recession. The PMI index fell to 47.2 in October compared to 49.1 in September, which is the fastest drop since last 2 years.

Any reading below 50 shows contraction in the activity and reading near to 47 is considered to be sharp drop which can be considered as an indicator of recession. The data shows the weakness of the whole euro zone economy led by two biggest economies of Euro zone France and Germany. PMI index of France fell to 46.8 in October while PMI index of Germany fell to 48.3 in the same month.

This data also increases the doubt about the credibility of France and Germany to support the euro zone industrial growth for long. Because of lower demand and spreading fear of another recession they are also facing the same slowdown.

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