Eurozone: Composite PMI falls to 20-month low
September 23, 2016
Recent data suggest that business activity in the Euro area has lost momentum. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, fell from 53.3 in August to 52.6 in September, the lowest reading since January 2015. The result undershot market analysts’ expectations of a softer fall to 52.8.
September’s downturn reflected weaker activity in the services sector, while conditions in the manufacturing sector improved. Service sector output rose at the slowest pace seen in over two years and the outlook for the sector fell. Meanwhile, manufacturers benefited from a sharp rise in new export business. Price pressures remained muted overall.
Regarding the two largest Eurozone economies, economic conditions improved notably in France but faltered significantly in Germany. Elsewhere in the region, economic momentum weakened. Commenting on the result, IHS Market analysts stated that, “while the underlying picture remains one of sluggish growth of close to 0.3% over the quarter as a whole, it also remains clear that the economic upturn is still fragile and failing to achieve any real traction. Job creation is wavering as a result, with employment rising at the slowest pace since April.”