Manufacturing activity in the Eurozone extended its sharp contraction throughout September, facing a widespread downturn primarily due to ongoing declines in demand, according to the latest data.
The Final Manufacturing Purchasing Managers’ Index (PMI) for September in the Eurozone, as reported by Hamburg Commercial Bank (HCOB), registered at 43.4. This figure marked a slight decrease from the August reading of 43.5, aligning with initial estimates. PMI values below the critical threshold of 50 indicate a contraction in manufacturing activity.
Furthermore, the productivity index, which is a crucial component of the PMI, combining both manufacturing and services data, showed a decline to 43.1 in September from 43.4 in August.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented on the sustained contraction in manufacturing: “Manufacturing PMI remained below the 50 level throughout the third quarter of 2023, covering the period from July to September. Therefore, we have a reasonable degree of confidence that the manufacturing recession will persist during this period.”
The persistent contraction in Eurozone manufacturing raises concerns about the region’s economic outlook and highlights the challenges faced by the manufacturing sector. Analysts and policymakers will be closely monitoring future PMI readings to assess any signs of improvement or recovery and the potential impact on the broader Eurozone economy.