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--Eurozone Composite PMI At 54.2, Down From 54.5 In Aug
By Jai Lakhani
     LONDON (MNI) - The Eurozone flash composite PMI, released Friday, fell to
54.2 in September, down from 54.5 in August. Here are five things we learned
from the release.
     --Euro Area Manufacturing At A 2-Year Low: 
     The manufacturing PMI dropped 1.3 points to 53.3 in September, meaning
hitting a 24-month low. Driving the fall was new orders received by factories
showing the joint-weakest rise since February 2015 as new export orders failed
to grow for the first time since June 2013.
     --Services Keep Predominantly Germany And To Some Extent France Afloat:
     Growth slowed in both Germany and France to two-year lows. Despite this,
however, they continued to outperform the rest of the Eurozone as a whole. Both
lost momentum in manufacturing, although services in Germany at an eight-month
high helped offset this. France had its weakest manufacturing reading in output
growth in two-years, with services faring little better, at a joint low since
the start of 2017.
     --Services Bright Spot In The Euro Area: 
     Service sector output growth ran a three-month high for the second
consecutive month, with job creation continuing to run at the highest since
October 2007. However, as was the case with manufacturing, inflows of new
business slowed, and backlogs of work were at the second-weakest rise in over a
year, suggesting the next coming months could see a slowdown.
     --Price Pressures Diverge Between Manufacturing And Services: 
     Input cost inflation remained elevated at the third-highest rate in over
seven years. However, the rise stemmed from input costs rising at the fastest
rate for over seven years in the service sector. Manufacturing saw costs rising
at the joint-slowest rate for just over a year.
     --Weakening Exports Reflect Geo-Political Concerns: 
     With Brexit, trade wars and weakening global demand rising, it is no
surprise export growth stagnated. "A near stagnation of exports contributed to
one of the worst months for the Eurozone economy for almost two years. Trade
wars, Brexit, waning global demand (notably in the auto industry), growing risk
aversion, destocking and rising political uncertainty both within the Eurozone
and further afield all fuelled the slowdown in business activity," said Chris
Williamson, Chief Business Economist at IHS Markit. 
--MNI London Bureau; tel: +44 203-586-2225; email:
MNI London Bureau | +44 203-865-3812 |