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Economy in Brief

Europe's Services PMI At New Low
by Robert Brusca January 6, 2009

The services PMI index for Europe fell to 42.06 from 42.47. All main reporting EMU members show very weak service sector indices. France is at an all time low (the data above date from May 2000 a period for which all these countries have observations). The EMU result is a ten year low.

Weakness continues to be the order of the day across Europe. The chart at the top shows that the MFG and services PMI’s both are dropping sharply, although the pace of decline in services hints at a slowdown in the unraveling.

The new wrinkle is the potential impact on Europe as gas availability from the Russian pipeline is being curtailed stemming from a dispute between Russia and the Ukraine. European nations are suffering to various degrees but smaller countries with leaner stockpiles are the most at risk. There is no sense yet that much activity has been curtailed because of the light natural gas deliveries, but an adverse economic impact remains a possibility if the deliveries continue to be short or cut off entirely.

NTC Services Indices for EU/EMU
  Dec-08 Nov-08 Oct-08 3Mo 6Mo 12Mo Percentile
Euro-13 42.06 42.47 45.76 43.43 45.92 48.47 0.0%
Germany 46.57 45.14 48.31 46.67 49.13 50.73 18.5%
France 40.57 46.17 47.54 44.76 46.65 50.44 0.0%
Italy 40.30 39.46 45.68 41.81 44.82 46.59 3.6%
Spain 32.10 28.23 32.22 30.85 34.12 38.20 11.9%
Ireland 34.14 32.60 36.05 34.26 37.47 42.01 4.3%
EU only              
UK (CIPs) 40.21 40.06 42.39 40.89 44.20 47.59 0.7%
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