September’s PMI surveys are consistent with a small decline in euro-zone GDP in Q3. And the increases in the prices indices suggest that inflation is not yet at a turning point.
The further fall in the euro-zone Composite PMI, from 48.9 in August to 48.2 in September, was in line with the consensus forecast and left the index at its lowest level since January 2021 when Covid restrictions were weighing on activity. On past form, it’s consistent with GDP declining by around 0.2% q/q. The sector breakdown showed that activity fell in both the manufacturing and services sectors. And the forward-looking indicators worsened too – the new orders index fell to just 46.0 and the future output index dropped to its lowest level since May 2020.
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