As business activity in Europe falls, purchasing power of the population increases

At the beginning of the fourth quarter, business activity in the Eurozone continued to decline. According to the preliminary estimates of Hamburg Commercial Bank (HCOB) and S&P Global, the composite PMI has declined in October to a three-year low of 46.5 points compared to 47.2 points in September. (Reminder: the indicator value above 50 points suggests growth of business activity, while the value below 50 points indicates its contraction).

The decline in business activity in the Eurozone is still conditioned by the strict monetary policy of the European Central Bank, as well as the general weakness of the global economy. The experts surveyed by Bloomberg forecast that rising energy prices due to the military conflict in the Middle East (it should be noted that the region accounts for a third of the world oil trade), as well as the general weakness of the global economy, may also contribute to the contraction of activity.

The PMI value in manufacturing has dropped to 43 points in October compared to 43.4 points a month earlier. S&P Global notes that the figure was affected by a significant decline in the number of new orders. The decline in the services sector has also accelerated in October: the index of business activity has reached the lowest for two and a half years of 47.8 points following 48.7 points in September.


In 2023, the purchasing power of an average European have amounted to €17.7 thousand, having increased by 5.8%, a report by the research company GfK suggests. The company estimates the aggregate purchasing power of Europeans in 2023 to reach €12.1 billion.

The first place in terms of purchasing power is taken by residents of Liechtenstein with €68.8 thousand, which is almost four times more than the average European level. Next come Switzerland (€49.6 thousand) and Luxembourg (€40.9 thousand). The top 10 also includes Iceland, Denmark, Ireland, Austria, Norway, Germany, and the United Kingdom.