Featured Image: Bartosz Wałecki, analyst, Michael / Ström Brokerage House
The PMI for the industry in the Eurozone in September was 44.8 points versus 45.8 points the previous month. The reading turned out to be worse than forecasted (45.7). Germany, where the industry index is faltering, is particularly negative. In September it was 40.3 points compared to 42.4 in the previous month. The German industry continues to show weakness, which is deepening month by month, and so far little indicates a rapid improvement in this sector.
The PMI reading for the service sector in the Eurozone remained in an area indicating increasing activity, however its value turned out to be much lower than expected. The reading was 50.5 points versus 52.9 points the previous month. A reading of 52.3 was expected. The service sector is in considerably better condition than industry, although the September index shows that the service sector is slowly losing strength. The reading in France stands out, where the PMI for services fell to 48.3 points, after a one-time August rebound to 55, due to the Olympic Games.
The cumulative PMI in September in the Eurozone was 48.9 points versus 51 points the previous month. This is the first reading since February indicating a slowdown in activity. There are some signs of slowdown in the service sector, in addition to the continued and even deepening weakness of the industrial sector. The service sector has been the driving force for some time and it is the one that maintained economic growth in the Eurozone.
The drop in PMI’s readings is not a good prognostication for economic growth in the Eurozone. Individual economies continue to show further signs of slowdown, especially in Germany, where technical recession seems particularly near.
Bartosz Wałecki, Analyst at Michael / Ström Brokerage House
Source: https://ceo.com.pl/pmi-w-strefie-euro-spada-gospodarki-wykazuja-oznaki-spowolnienia-36420
