Purchasing managers‘ indices in the euro zone: Bad mood in September

According to the September survey, the comprehensive composite purchasing managers‘ index for the euro zone lost 1.5 points and at 50.4 points (75-month low) is only slightly above the growth threshold of 50 index points. The decisive factor was a significant decline in demand from service providers and industry. In particular, the downturn in industry has accelerated again, and it seems to be increasingly the case that the previously robust services sector is being pulled down as well. According to IHS Markit, sentiment barometers in the entire currency area have been lower than they have been since 2013. The German economy, and German industry in particular, appears to be increasingly at the centre of economic weakness. And according to business expectations, there is no turn for the better in sight. At the end of the third quarter, the growth prospects for the euro zone are clouding over on the basis of the survey results.
The German composite index lost 2.6 points and dropped to 49.1 points, not only below the neutral level of 50, but also to its lowest level for almost seven years. The mood barometers both among service providers and in industry declined. At 41.4 points, the industrial index even dropped to its lowest level for more than ten years. Falling production figures, weak demand and pessimistic business expectations due to the trade conflicts, the problems in the automotive industry and the unsolved Brexit are weighing on the mood in the industry. And this now seems to be having a more pronounced effect on the service providers as well.
The mood among purchasing managers in France also deteriorated in September. However, the composite index remains above the critical threshold of 50 with 51.3 points after 52.9 points in the previous month. Here, too, the two measured figures for the service providers and the industry each fell. According to the survey results, the growth in incoming orders was lower. Nevertheless, employment intentions remained positive at a low level. According to IHS Markit, business expectations for the coming twelve months were also positive and even better than in the previous month. Concerns and problems in the rest of the currency area do not seem to have made France so strong so far.

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