Investing.com – Manufacturing activity in the euro zone fell more-than-expected in September, falling to the lowest level since August 2009, preliminary data showed on Thursday.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index fell to a seasonally adjusted 48.4 in September, down from 49.0 in August.
Analysts had expected the index to decline to 48.6 in September.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The report showed that service sector activity in the euro zone dropped to a 26-month low in September.
The preliminary services purchasing managers’ index fell to a seasonally adjusted 49.1 in September compared to a reading of 51.5 in August. Analysts had expected the index to ease down to 51.1.
Output growth slowed to near-stagnation in both Germany and France, showing the weakest rates of expansion since their recoveries began over two years ago.
The rest of the euro zone, meanwhile, contracted for the fourth successive month, with the rate of decline accelerating to the fastest since July 2009.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The flash PMI indicates that the Eurozone economy probably stagnated in the third quarter, having slipped into contraction for the first time in just over two years in September.”
“Furthermore, the forward-looking indicators raise the risk of further contraction in the coming months,” he added.
Following the release of the data, the euro extended losses against the U.S. dollar, with EUR/USD slumping 0.42% to trade at 1.3517.
Meanwhile, European stock markets added to heavy losses. The EURO STOXX 50 tumbled 3.8%, France’s CAC 40 sank 3.85%, the FTSE 100 fell 3.3%, while Germany's DAX plunged 3.75%.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index fell to a seasonally adjusted 48.4 in September, down from 49.0 in August.
Analysts had expected the index to decline to 48.6 in September.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The report showed that service sector activity in the euro zone dropped to a 26-month low in September.
The preliminary services purchasing managers’ index fell to a seasonally adjusted 49.1 in September compared to a reading of 51.5 in August. Analysts had expected the index to ease down to 51.1.
Output growth slowed to near-stagnation in both Germany and France, showing the weakest rates of expansion since their recoveries began over two years ago.
The rest of the euro zone, meanwhile, contracted for the fourth successive month, with the rate of decline accelerating to the fastest since July 2009.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The flash PMI indicates that the Eurozone economy probably stagnated in the third quarter, having slipped into contraction for the first time in just over two years in September.”
“Furthermore, the forward-looking indicators raise the risk of further contraction in the coming months,” he added.
Following the release of the data, the euro extended losses against the U.S. dollar, with EUR/USD slumping 0.42% to trade at 1.3517.
Meanwhile, European stock markets added to heavy losses. The EURO STOXX 50 tumbled 3.8%, France’s CAC 40 sank 3.85%, the FTSE 100 fell 3.3%, while Germany's DAX plunged 3.75%.