- Prior 47.9
- Composite PMI 47.2 vs 47.1 prelim
- Prior 46.7
The revisions are a slight improvement to the initial estimates and they are better than in August at least. But the devil lies in the details, as demand for euro area goods and services is seen falling at its fastest pace since November 2020. Output for both manufacturing and services also declined towards the end of Q3, only the second time this year that both have contracted overall. HCOB notes that:
“Given the HCOB Eurozone PMI for services perked up in September, you may be tempted to spot a few green shoots popping up. Not so fast. For starters, the index is still in contractionary territory. Even glancing at Germany and Spain, where the index moved above 50, this happened only marginally, indicating more of a standstill in these parts of the euro area. Then you have the second largest economy of the eurozone, France, where business activity is not just dipping, but nosediving, signaling a deeper economic downturn.
“The HCOB Composite PMI for the Eurozone did rebound a bit. However, we can’t jump on the hope train yet. Blame it on new business, which is plummeting especially in Germany and France. Accordingly, outstanding business continued to decline, and business expectations fell further below their long-term average.
“There is still a frenzy for workers in the services sector. Indeed, Eurozone firms bulked up their teams at a faster pace than in August. That is a head-turner, considering new business is in the doldrums. One guess could be that with the economic waters getting choppy, people are pushing back to the job hunt, letting companies plug long-lasting staff gaps.
“Amid discussions at the European Central Bank about the next interest rate decision, the hawks are receiving some backing with the latest PMI price indices. The Input Price Index, which is heavily influenced by wages and energy prices, increased to a four-month high. However, the doves will point out that prices charged for services increased at the lowest rate since summer 2021. Prices are nevertheless still climbing the ladder rather fast, a weird twist when the economy is singing the blues.”
