Eurozone’s business activity increases marginally in September - IHS Markit

The report from IHS Markit revealed on Wednesday that the Eurozone’s business activity stalled in September as faster growth of manufacturing (led by Germany) was offset by a renewed downturn in the service sector, linked to resurgent COVID-19 infection rates.

According to the report, Flash Eurozone Manufacturing PMI climbed to 53.7 in September from 51.7 in August. That was the highest reading since August 2018. Economists had forecast the indicator to increase to 51.9 in September. The expansion in Eurozone’s manufacturing sector was driven by manufacturing output, which recorded its fastest growth since February 2018, as new orders posted their largest rise seen over this period.

Meanwhile, Flash Eurozone Services PMI Activity Index fell to 47.6 from 50.5 in August. That marked the first decline in services activity since June as the sector recorded the largest contraction of output since May, albeit with the rate of decline running far weaker than seen during the height of the pandemic. Economists had forecast the indicator to remain at 50.5 in September.

The flash IHS Markit Eurozone Composite PMI dropped to 50.1 in September from 51.9 in the previous month. That was the lowest reading since June, indicating near stalling of the region’s economy at the end of the third quarter as rising infection rates and ongoing social distancing measures curbed demand, notably for consumer-facing services. Economists had forecast the indicator to decrease to 51.7 in September.