Eurozone manufacturing sector growth at 2-year low

By Muhammed Ali Gurtas

ANKARA (AA) – The Eurozone Purchasing Managers’ Index (PMI) for the manufacturing sector stood at 53.2 in September, down from August’s 54.6, according to a London-based global data company on Monday.

"Growth was the weakest since September 2016; however, in line with the downward trend seen since the start of the year," IHS Markit report said.

The global data provider said consumer goods recorded the strongest increases in production, new orders and purchasing, while price pressures remained most elevated in the capital goods sector.

"The slowdown was broad-based, with only the Netherlands (three-month high) recording an improvement in its PMI when compared to August,” according to the report.

"Of the four largest eurozone economies, Germany remained the best-performing, but growth here slid to its lowest in over two years," it said.

IHS Markit stated that the general slowdown in the manufacturing sector was again closely linked to a weakening trade cycle.

"Eurozone new export orders were little-changed during September, rising only slightly and at the weakest rate in the current 63-month sequence of growth.

"The impact of the slowdown in exports naturally spilled over to overall order books in September, with the latest data showing the weakest gain in total new work for 25 months," the report read.

The eurozone/euro area or EA19 represents member states that use the single currency — euro — while the EU28 includes all member countries of the bloc.

Pointing a similar slowdown in output expansion, the company said: "Output rose to the weakest degree since May 2016, although growth remained a little firmer than the rise in new work.”

"This allowed manufacturers to reduce their backlogs of work marginally for the first time in nearly three-and-a-half years," IHS Markit added.

As a critical measurement to indicate the health of the manufacturing sector, the monthly PMI indices — based on surveys and national data — show a growth with a value above 50 points, a contraction with a level below 50 points, compared to the previous month.