Eurozone PMI Slips in September

Fewer new orders and increasing layoffs marked a worsening decline for eurozone companies last month, diminishing hopes that the region’s economy would return to growth in the fourth quarter.

Markit’s Eurozone Composite Purchasing Managers Index (PMI) fell to 46.1 in September from 46.3 in August. The index has been stuck below the 50 mark that divides growth and contraction for all but one of the past 13 months.

The rate of decline in manufacturing output eased to a five-month low, while the contraction in services output accelerated to its fastest since July 2009.

Markit Chief Economist Chris Williamson said:

The final Eurozone PMI came in slightly higher than the flash estimate but still signalled one of the steepest monthly downturns seen over the past three years. It seems inevitable that the region will have fallen back into recession in the third quarter. … Rather than clearing, the cloud of uncertainty hanging over business investment and spending got notably darker in September. Business confidence in services deteriorated further, down to its lowest since March 2009, as worries about Spain intensified.

In separate reports, Markit indicated that the Germany Composite Output Index came in at 49.2 in September, up from 47.0 in August, but employment fell at ts fastest pace since May 2009. France’s Composite Output Index showed 43.2, down from 48.0 in August, and a 42-month low. And the Spanish Business Activity Index fell to 40.2 in September from 44.0 in the previous month. Activity there has now decreased in each of the past 15 months.

Ireland remained the only nation to report an increase in overall economic activity, with its rate of growth reaching a near one-and-a-half year high.

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