At 48.3 the final PMI composite index for November signaled a renewed contraction of business activity. While 0.2 points stronger than its flash estimate, the latest print was still 1.7 points below October and a 10-month low.

At the national level, the best-performing countries were Ireland (55.2) and Spain (53.2) both of which saw an expansion of business activities. The weaker performing countries were Italy (47.7), Germany (47.2) and France (45.9), all of which were well short of the 50-growth threshold. Ireland actually managed a record 30-month high but the weakness of the larger two member states was enough to offset growth seen in the other smaller countries.

The final services PMI for November was 49.5, some 0.3 points above the flash estimate but still 2.1 points below October's final mark. This signaled a slight contraction. Demand weakened for a third month in a row with new business from foreign sources especially soft. Still, employment continued to rise, sustaining a history of job creation going back almost 4 years. Both input cost and output charges increased at faster rates than in October. Compared to their respective pre-pandemic trends, inflation rates were elevated in both cases.

Today's update sustains pressure on the ECB to cut interest rates next week but the pick-up in the inflation indicators strengthens the case for only a 25 basis point ease. The final November data put the Eurozone RPI at minus 12 and the RPI-P at minus 2 meaning that overall economic activity is falling just marginally behind market forecasts.

The consensus looks for no revision in the composite final and services final from the flash indexes at 48.1 and 49.2, respectively.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global using a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.