Euro Zone Manufacturing Activity Registers Swiftest Contraction Since COVID-19 Outbreak in July

Manufacturing activity in the euro zone contracted at the fastest pace since the outbreak of the coronavirus in July as demand slumped despite sharp price cuts at factories, PMI data showed.

The economy of Germany, Europe’s largest economy, is quite weak, and the economies of France and Italy, the second and third largest economies in the euro zone, have also deteriorated significantly since June.

An index measuring output fell to 42.7 from 44.2, the lowest in more than three years.

The index is seen as a good gauge of the health of the economy.

The European Central Bank last week raised the odds of a pause in rate hikes in September as inflationary pressures showed tentative signs of easing and fears of a recession mounted.