Experts comment on Eurozone PMI data: The Eurozone

Ai Huicha, September 5th: Dr. Cyrus de la Rubia, chief economist of Hamburg Commerzbank, said: The euro area did not fall into recession in the first half of this year, but it will face greater challenges in the second half of the year. Because the once-stable service sector has become a drag on the economy, and manufacturing has likely not yet bottomed out. These disappointing numbers have led us to lower our GDP forecast for the third quarter, which is now -0.1%. The unexpected rise in input prices cast doubt on the prospect of a rapid decline in inflation. Additionally, employers are less keen on expanding their teams. Judging by the recent situation, this indicates that they will lay off staff soon, not postponed. For now, though, the drop in backlog and new orders doesn't appear to be severe enough to trigger mass layoffs. Among the big euro zone countries, the main drag came from Germany and France, where services sector activity slowed at the fastest pace this year. In contrast, Italy and Spain saw relatively mild recessions in August. But judging from the situation in Germany and France, Italy and Spain seem unable to avoid a deeper service sector recession.