The survey also hinted at a continuation of growth for the remainder of the year, with businesses reporting that new orders were at a five-month high. Factory gate prices fell, however, dropping for the first time in six months as manufacturers passed lower raw material costs on to customers. “Even in the United States, there is a fair amount of import substitution”, said Chris Williamson, chief economist at survey compiler Markit. Fears of China’s economy cooling rapidly, coupled with authorities there devaluing the currency, spooked financial markets last month.
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The marked decline in manufacturing costs reflected widespread commodity price falls, especially oil.
The data pointed to 0.4 percent growth of the German economy in the third quarter, but a mere 0.1 percent expansion in France, according to Markit’s Williamson, who said that “France remains a particular concern”. Employment rose for an eleventh straight month, although the rate of job creation eased to an eight month low as many firms focused on boosting productivity. Backlogs of work rose to the highest since mid-2011.
A manufacturing PMI fell to 52, matching expectations but down from 52.3, as export orders growth slowed. That was the same as August, which was its lowest since October 2013. Economists had predicted a reading of 54.2. The services PMI is forecast to rise to 51 from 50.6 a month ago.
That will be welcome news to European Central Bank policymakers struggling to get inflation close to its target of just below 2%.
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This follows a separate report issued Monday showing new construction starts in August dropped 11% to a seasonally adjusted annual rate of $554.5 billion in the US, according to construction industry data provider Dodge Data and Analytics.
