The Eurozone PMI fell to 53.8 – substantially lower than analysts expected at 55.9. Some highlights from the report:
- Composite output: Growth slumped to seven-month low (53.8 from 56.2 in August). Expansion in Q3 still the second strongest since Q3 2007.
- Services: Expansion slowed to weakest in seven months (53.6, from 55.9 in August). Growth for Q3 down only slightly on Q2’s near three-year high.
- Manufacturing: Growth slipped to 11-month low (54.4, from August’s 57.1). On average, growth in Q3 was the weakest so far this year.
- New orders composite: Growth slipped sharply to 10-month low and to a level broadly in line with long-run series average.
- Backlogs: Pace of increase slowed further to weakest in seven months.
Chris Williamson, Chief Economist at Markit commented on the weak report:
“The September PMI data indicate that euro area economic growth slowed sharply at the end of the third quarter. Although the survey suggests that GDP will have risen by around 0.6% for the third quarter as a whole, slipping from 1.0% in the second quarter, the weak September reading sets the scene for a further slowing in the final quarter of the year to a pace more in the region of 0.3%. Growth in France remained reassuringly resilient, and a sharp slowing in Germany may merely represent an expected cooling from the surging pace of expansion seen earlier in the year. However, outside of these two countries, double-dip recession fears will be heightened by a renewed contraction of economic activity and accelerating job losses in September.”