PMI data show that Europe is in a mild recession

The level of business activity in the Eurozone contracted in November, posting a fifth consecutive month of decline. This is a sign of impending recession in Europe as consumers proceed to cut spending.

S&P Global's final composite Purchasing Managers' Index (PMI) hit 47.8 in November. This figure is up from a 23-month low of 47.3 recorded a month earlier.

In fact, it is the fifth consecutive month of declining output. Thus, the probability that the Eurozone will enter recession, is growing. This is reported by Chris Williamson, a leading expert of S&P Global Market Intelligence.

However, a modest downturn in the European economy has now been observed. Overall rate of contraction is being eased in November, with a possible 0.2% drop in GDP. 

According to a Reuters poll, there is a 78 % chance of EU countries entering a recession in 2022.  The economy is expected to contract by 0.4% in the fourth quarter. 

The input and output price index fell to a 3-month low, hovering at 62.3. In this regard, inflationary pressures in Europe have peaked. This is a positive signal for the European Central Bank (ECB).

Williamson said that inflation hit its highest level. But it is likely to be slower in the coming months. If no severe weather is expected, exacerbating the energy crisis in the region, the recession in the EU countries will be short-lived.