Europe Economic Update: Recession Possible
Markit’s final September Composite Purchasing Managers’ Index (PMI) came in at a four-month low of 53.6 and weaker than an earlier estimate of 53.9. In August, it was 54.3. The index has been above the 50 mark denoting expansion since July 2013.
The PMI for the dominant service industry dipped as well, settling at 53.7 from August’s 54.4 and lower than a flash estimate of 54.0. A similar survey of manufacturing firms released on Thursday had also fallen, to 52.0 from 52.3.
Cooling new business orders, which came in much weaker than the flash reading, led firms to take on staff at the slowest pace since January.
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But in one piece of bright news, the service sector PMI showed firms charged higher prices last month for the first time since August 2011.
Several ECB policymakers, led by President Mario Draghi, have publicly hinted the trillion-euro stimulus programme could be increased or extended if inflation is seen failing to meet the central bank’s near 2 percent target.
Those calls grew louder last week after official data showed euro zone inflation slipped below zero again in September.
An earlier composite PMI from Germany, Europe’s number one economy, fell to 54.1, weaker than a flash estimate of 54.3 and lower than August’s 55.0.
France’s composite reading rose to 51.9, a three-month high, and pointed to 0.2 percent growth in the third quarter, according to Markit.
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