Euro-Area Manufacturing Slump Deepens in Worst Month Since 2012
The euro area’s manufacturing sector slumped in September as German factories experienced their worst month since the depths of the financial crisis.
IHS Markit’s index for manufacturing in the euro region came in at 45.7 last month, slightly higher than the initial estimate of 45.6, but still the lowest level since October 2012.
New orders saw the sharpest contraction in almost seven years, with demand weakening both at home and abroad. A measure of sentiment stayed subdued amid concerns over the U.S.-China trade war and Brexit.
“The health of the eurozone manufacturing sector went from bad to worse in September,” which is “sending increasingly grim signals for the fourth quarter,” said Chris Williamson, Markit’s chief business economist. “The September PMI points to manufacturing output falling at a quarterly rate in excess of 1%, representing a severe drag on GDP in the third quarter.”
The downturn was led by Germany, the euro area’s largest economy, which saw its factory gauge drop to 41.7, compared with a flash estimate of 41.4. That’s the lowest since 2009. A reading for France, meanwhile, stood at 50.1, worse than initially thought and just above the 50 level which separates expansion from contraction.
Europe’s economic slowdown has already prompted a response from the European Central Bank. It cut interest rates last month and announced a new round of asset purchases, joining a global wave of monetary easing.
©2019 Bloomberg L.P.