Composite PMI drops to over six-year low in September
Leading indicators point to weakening dynamics in the Eurozone’s economy at the end of Q3. The Flash Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 50.4 in September, down from August’s 51.9 and marking the worst result in over six years. As a result, the PMI lies just above the 50-point threshold that distinguishes expanding business activity in the Eurozone.
The details of the release revealed a continued two-speed Eurozone economy. The manufacturing PMI dropped to the lowest level seen since 2012 and came in at 46.0 in September, signaling a sharp contraction in the sector. Meanwhile, the Services PMI Activity index remained solidly in expansionary territory, although fell to an eight-month low of 52.0, suggesting that contagion could be starting to spill over. New orders for both goods and services fell in September, while confidence was gloomy and employment rose at the slowest pace seen since the start of 2015.
Regarding the Eurozone’s two largest economies, Germany’s composite PMI dropping into contractionary territory in September, as the manufacturing PMI recorded the worst result since mid-2009 during the global financial crisis. France also saw its composite PMI drop, although it remained in expansionary territory. Elsewhere in the region, activity softened to the lowest result since November 2013.