The flash estimate of Markit’s Eurozone PMI Composite Output Index slipped to 52.6, down from 52.9 in August, to a 20-month low. The average index reading over the third quarter (52.9) is below that of quarter two (53.1), also suggesting that the Eurozone economy is likely to see sluggish growth in the third quarter.
Contrasting growth trends were seen at manufacturers and service providers. Flash Eurozone services PMI Activity Index came in at 52.1 from 52.8 in August, a 21-month low. While flash Eurozone manufacturing PMI expanded at the quickest pace since December of last year, was up at 52.6 from 51.7 in August, a 3-month high.
By nation, output growth eased to a 16-month low in Germany, mainly reflecting a sharp slowdown in the service sector. France, meanwhile, registered its fastest rate of economic expansion since June 2015, and outperformed Germany for the first time in over four years. Robust increase in French service sector activity offset the ongoing stagnation in manufacturing.
The pace of job creation across the currency union also wavered at the end of the third quarter. September saw employee numbers rise at the slowest pace since April. Inflationary pressures remained relatively muted during September, but showed some tentative signs of increasing.
“With inflationary pressures also still relatively benign and business confidence at service providers dipping to a 21-month low, the door remains open for policymakers to provide further policy support later in the year if they see economic conditions moderate further," said Rob Dobson, Senior Economist at IHS Markit.
