The eurozone’s economic recovery from its deepest downturn on record has stuttered this month, particularly in services, as the pent-up demand unleashed last month by an easing of COVID-19 lockdowns dwindled, a survey showed yesterday.
To contain the spread of the virus, governments imposed strict lockdowns — forcing businesses to close and citizens to stay home, bringing economic activity to a near halt.
After many of those restrictions were relaxed, activity in the eurozone last month expanded at the fastest pace since the middle of 2018, but as infection rates have risen again in parts of the region, some earlier curbs have been reinstated.
Photo: Bloomberg
IHS Markit’s flash Composite Purchasing Managers’ Index, seen as a good gauge of economic health, sank to 51.6 from last month’s final reading of 54.9.
While still above the 50-mark separating growth from contraction, it was below all forecasts in a Reuters poll that had predicted no change from last month.
“The eurozone’s rebound lost momentum in August, highlighting the inherent demand weakness caused by the COVID-19 pandemic,” IHS Markit economics director Andrew Harker said. “The recovery was undermined by signs of rising virus cases in various parts of the euro area.”
An index measuring new business dropped to 51.4 from 52.7 and once again some of this month’s activity was derived by businesses completing backlogs of work.
Growth in the bloc’s dominant service sector stalled — its PMI plummeted to 50.1 from 54.7, below all forecasts in the Reuters poll that predicted a small dip to 54.5.
With demand waning, services firms cut headcount for a sixth month and more sharply than last month, with the employment index falling to 47.7 from 47.9.
Factory activity — which did not experience quite as sharp a decline as the service industry during the height of the pandemic — expanded for a second month.
The manufacturing PMI dipped to 51.7 from 51.8, confounding the Reuters poll forecast for a rise to 52.9.
An index measuring output, which feeds into the composite PMI, rose to 55.7 from 55.3.
Factory purchasing managers bought fewer raw materials, indicating that they do not expect a big pickup in activity.
The quantity of purchases index only rose to 49.6 from 48.3.
A full bounce back from the eurozone’s deepest recession on record would take two years or more, a Reuters poll of economists published on Thursday showed.
“The eurozone stands at a crossroads, with growth either set to pick back up in the coming months or continue to falter following the initial post-lockdown rebound,” Harker said.
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The artificial intelligence (AI) boom has triggered a seismic reshuffling of global equity markets, with Taiwan and South Korea muscling past European nations one by one. With its stock market now valued at nearly US$4.3 trillion, Taiwan surpassed the UK, Europe’s biggest market, earlier this month, data compiled by Bloomberg showed. South Korea is about US$140 billion away from doing the same. The tech-heavy Asian markets have shot past Germany and France in the past seven months. The shift is largely down to massive gains in shares of three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),
The US Department of Commerce last week ordered multiple chip equipment companies to halt shipments of certain tools to China’s second-largest chipmaker, Hua Hong Semiconductor Ltd (華虹半導體), its latest action to slow the country’s development of advanced chips, two people familiar with the matter said. The department sent letters to at least a handful of companies informing them of restrictions on tools and other materials destined for two Hua Hong facilities US officials believe make China’s most sophisticated chips, the people said. Top US chip equipment companies Lam Research Corp, Applied Materials Inc and KLA Corp, each of which has significant
RSS