September Eurozone PMI Manufacturing shows a persistent trend of contraction, finalizing at 43.4, a marginal decline from August’s 43.5. This marks a continuous 15-month spell where the headline index has been below the 50.0 threshold, indicating contraction.
Excluding Greece, which barely recorded expansion with Manufacturing PMI of 50.3, every other country monitored in the survey showed downturns. A country-wise breakdown ranks Greece at the top, followed by Ireland (49.6), Spain (47.7), Italy (46.8), France (44.2), Netherlands (43.6), Austria (39.6), and Germany (39.6).
Cyrus de la Rubia, the Chief Economist at Hamburg Commercial Bank, painted a clear picture of the current manufacturing scenario. He stated, “We are feeling pretty certain that the recession in manufacturing continued during this period.” He also added that a significant pickup might only materialize with the advent of the new year. However, he expressed optimism by highlighting the possibility of reaching the lowest point in the current economic cycle.
Drawing parallels with past recessions, de la Rubia remarked, “With the exception of the great recession in 2008/2009, output prices have never decreased at a pace faster than the current three-month average.” He emphasized the rarity of such sharp falls and indicated the likelihood of a rebound.
France and Germany led the downturn, while Spain and Italy showed relative resilience. However, when viewed through the lens of ongoing slowdown duration, Italy emerged as the poorest performer. Its manufacturing sector has been in recession since the latter half of 2022, with Germany joining the downturn in the second quarter of the current year.
“Given our forecast that the global manufacturing sector is bottoming out, these countries may be spared from a downturn lasting longer than two quarters,” de la Rubia added, hinting at a silver lining in the looming clouds of economic contraction.