Eurozone Manufacturing Activity Contracts Most Since 2012
October 01 2019 - 12:43AM
RTTF2
The euro area manufacturing sector contracted at the fastest
pace in nearly seven years as output, new orders and purchasing
fell sharply in September, final data from IHS Markit showed
Tuesday.
The final manufacturing Purchasing Managers' Index dropped to
45.7 in September from 47.0 in August. But the reading was above
the flash estimate of 45.6.
The reading has remained below the neutral 50 for the eighth
consecutive month, indicating contraction in the sector. The score
was the lowest since October 2012.
The September PMI points to manufacturing output falling at a
quarterly rate in excess of 1 percent, representing a severe drag
on GDP in the third quarter, Chris Williamson, chief business
economist at IHS Markit said.
New orders shrank at the sharpest rate since October 2012 as
both domestic and foreign orders weakened. Production also declined
the most since 2012.
This in turn weighed on payroll numbers. The degree of decline
in job cut was the biggest since April 2013.
Ongoing concerns over Brexit and the negative effect on trade of
the US-China trade war, confidence about the future was
little-changed since August, when sentiment was at its lowest level
since November 2012.
Input prices declined at the joint-sharpest since April 2016.
Manufacturers were subsequently able to reduce their own charges
for a third successive month.
The region's manufacturing downturn was led in the main by
rapidly deteriorating operating conditions in Germany.
Germany's manufacturing sector contracted the most since the
global financial crisis in 2009. The headline IHS Markit/BME
manufacturing PMI declined to 41.7 in September from 43.5 in
August. Nonetheless, the reading was above the flash 41.4.
France's manufacturing activity was broadly stable as reductions
in output, new orders and pre-production inventories roughly offset
a rise in employment and longer supplier delivery times.
The manufacturing PMI came in at 50.1 in September, down from
51.1 in August and the flash 50.3.
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