Eurozone Manufacturing PMI was slightly disappointing in September, dipping from 43.5 to 43.4, failing to meet expectations set at 44.0. On the other hand, Services PMI indicated a slight revival, progressing from 47.9 to 48.4, surpassing the anticipated 47.5. Composite PMI reflected this marginal uplift, moving from 46.7 to 47.1.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank predicts a contraction for Eurozone in the third quarter, with a potential decrease of -0.4% relative to the previous quarter.
In services sector, “the heat on input prices shows that the risk of a wage-price spiral must remain very much on the radar of the ECB.” Manufacturing continues to be a drag. But “destocking process” may bottom out over the next few months, which is crucial for the manufacturing sector’s recovery for the beginning of next year.
Making a comparison between the two European giants, de la Rubia pointed out that while the French manufacturing sector “catching up” with Germany’s weaknesses. When it comes to services, France’s sector is “in a much worse state”.
