The preliminary “flash” reading of the Markit Purchasing Managers Index (PMI) for manufacturing rose to 50.4 in September from 48.3 in August, rising above the 50 mark that separates expansion and contraction and beating analysts’ expectations for a 48.5 reading.
Advertisement
“Underpinning the slowdown in total new order growth was a sharp reduction in worldwide demand as new export orders dropped to the greatest extent for 31 months”. Factory gate prices fell, however, dropping for the first time in six months as manufacturers passed lower raw material costs on to customers.
Chris Williamson, Markit’s chief economist, commented on the data, saying there were still concerns over a lack of job creation.
The marked decline in manufacturing costs reflected widespread commodity price falls, especially oil.
Mr. Williamson said the PMI pointed to third-quarter euro zone GDP growth of 0.4 percent, similar to the consensus from a Reuters’ poll of economists earlier this month.
The latest index reading is also weaker than the post-financial crisis average of 54.3.
Growth was broad-based across the manufacturing and service sectors, with the pace of expansion marginally sharper in the former.
“New order growth moderated, having increased in August at the fastest rate since January”. Backlogs of work rose to the highest since mid-2011. France continued to lag the upturn, but saw growth pick up from the near-stagnation seen in August.
During the first eight months of 2015, total construction starts on an unadjusted basis are up 15% from the same period a year ago.
Advertisement
GBP/USD hit 1.5298 during European morning trade, the pair’s lowest since September 8; the pair subsequently consolidated at 1.5346, slipping 0.08%.
