The eurozone Purchasing Manager Index (PMI) has reached, 52.8 points, the lowest level since December last year reflecting ongoing challenges for Eurozone growth.
Key economic challenges such as employment and low inflation remained persistent, with concerns of deflation growing amid weak economic demand and falling company prices. While the service sector PMI slowed to a three month low, the manufacturing index reached 50.5, the lowest level since July last year.
Chris Williamson, chief economist at Markit commented: “The survey paints a picture of ongoing malaise in the eurozone economy. With growth of output and demand slowing, employment once again failed to show any meaningful increase. Such torpor meant prices continued to fall as firms fought for customers, which will inevitably heighten concerns that the region is facing deflation.
Growth improved slightly in Germany, which had seen a 10 month low in August. However, a faster expansion of the service sector was countered by weak manufacturing data, new orders fell for the first time in over a year.
Signals from France were mixed, while the composite output index reached a three month low, the manufacturing PMI rose to a four month high. Output growth outside of France and Germany slowed to a six-month low, with order inflows registering the weakest rise for ten months
“For a central bank hoping that the economic data flow will start to improve, the ECB will be disappointed by the ongoing weakness of the PMI. The survey data suggest GDP is on course to grow by 0.3% at best in the third quarter, buoyed by a 0.4% expansion in Germany but dragged down by stagnation in France and sluggish growth in the rest of the region, “ Williamson said.