Euro Area: Business activity slumps at slightly softer pace in September
The HCOB Flash Eurozone Composite Purchasing Managers’ Index (PMI) rose to 47.1 in September from 46.7 in August, when it marked the weakest reading in 33 months. Consequently, the index remained entrenched below the 50 no-change threshold, signaling another deterioration in business conditions compared to the prior month.
Output and demand fell among both manufacturing and services firms, while employment across the two sectors came close to stagnating. Specifically, orders fell at the sharpest pace in nearly three years. Lastly, business confidence turned more downbeat. On the price front, in the manufacturing sector, input costs fell at a softer pace. Meanwhile, in the services sector, input prices rose sharply amid rising wages and fuel costs. On the other hand, the manufacturing sector saw the eighth consecutive drop in input prices. meanwhile, output prices fell at a faster clip in the manufacturing sector and increased at the softest rate in 25 months in the services sector.
Commenting on the release, Bert Colijn, senior economist at ING, stated:
“With hiring slowing to a snail’s pace, concerns about activity in the months ahead remain. Our base case is for a continuation of very slow growth, more or less stagnation, which means that a quarter of negative growth is certainly imaginable.”