trending Market Intelligence /marketintelligence/en/news-insights/trending/Fb2qBGk7D5O-YE5dLoqQaw2 content esgSubNav
In This List

Eurozone manufacturing downturn steepest in 7 years

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Eurozone manufacturing downturn steepest in 7 years

The manufacturing downturn in the eurozone continued for the eighth successive month in September, dropping to the lowest level in seven years on the back of sharp declines in new orders and output, final data from IHS Markit showed.

The eurozone manufacturing purchasing managers' index slid to 45.7 in September from 47.0 in August. However, the September print was marginally above the Econoday consensus estimate and the preliminary IHS estimate of 45.6.

The 50 mark separates expansion from contraction.

New orders declined at the sharpest rate since October 2012 while exports continued to fall. Production logged the greatest monthly fall since the end of 2012.

The manufacturing downturn was led by Germany, as its PMI index fell to the lowest level of 41.7 since June 2009 from 43.5 in August, missing expectations. France's manufacturing sector stalled, with 50.1 in September, compared to 51.1 in the previous month.

Spain, Italy and Ireland also recorded below 50 readings during September.

The data underscores the limitations of the European Central Bank's monetary policy and the need for fiscal reforms in the eurozone, said Michael Hewson, chief market analyst at CMC Markets U.K.

While ECB President Mario Draghi defended the central bank's latest stimulus, he said the central bank may have to keep the stimulus package in place for a long time in the absence of any fiscal support.

U.S.-China trade tensions and Brexit uncertainty continued to weigh on manufacturers' sentiment, which was little changed from the previous month's lowest reading since November 2012.

The survey results indicate a worsening situation for the eurozone manufacturing sector, sending "increasingly grim signals for the fourth quarter," said Chris Williamson, chief business economist at IHS Markit.