The eurozone’s economic recovery stalled in September, with rising COVID-19 infections leading to a revival of service sector operations in the region.
The two-speed economy is evident, despite the fact that the growing demand for factories, particularly in the export markets and many countries, is said to have boosted retail sales, while the large service sector has fallen head-on into direct consumption. Businesses in particular have been hit hard by the intensification of virus concerns.
Job losses in the service sector also increased as more companies became concerned about costs and overheads. Fortunately, factories have seen a slowdown in staff reductions, with pressure on capacity beginning to emerge, which has reached an overall job reduction rate.
Encouragement comes from further improvement in companies ’expectations for the coming year, but this optimism often indicates a fall in the epidemic rate, which is not guaranteed for the coming months. The main concern now is whether the weakness in September data will intensify in the fourth quarter and then go into recession again after a dismally brief recovery in the third quarter.