Eurozone Preliminary Manufacturing PMI deteriorates to 48.5 in September vs. 48.7 expected

• Eurozone Manufacturing PMI arrives at 48.5 in September vs. 48.7 expected.
• Bloc’s Services PMI drops to 48.9 in September vs. 49.0 expected.
• EUR/USD keeps the red near 0.9780 on the mixed Eurozone PMIs.

The Eurozone manufacturing sector fell further into contraction in September, the latest manufacturing activity survey from S&P Global research showed on Friday.

The Eurozone Manufacturing purchasing managers index (PMI) arrived at 48.5 in September vs. 48.7 expectations and 49.6 last. The index hit a 27-month low.

The bloc’s Services PMI dropped sharply to 48.9 in September vs. 49.0 expected and August’s 49.8. The indicator reached 19-month lows.

The S&P Global Eurozone PMI Composite fell to 48.2 in September vs. 48.2 estimated and 48.9 previous. The gauge clocked its lowest level in 20 months.

Comments from Chris Williamson, Chief Business Economist at S&P Global

“A eurozone recession is on the cards as companies report worsening business conditions and intensifying price pressures linked to soaring energy costs.”

“The early PMI readings indicate an economic contraction of 0.1% in the third quarter, with the rate of decline having accelerated through the three months to September to signal the worst economic performance since 2013, excluding pandemic lockdown months.”

FX implications

EUR/USD keeps its renewed downside intact near 0.9780 on mixed euro area PMIs. The spot is down 0.63% on the day.