Eurozone and UK manufacturing growth slipped back in September, according to the latest purchasing managers surveys.
The Markit/CIPS index for Britain fell from 57.1 in August to 56.7 last month, slightly lower than the expansion to 57.3 economists had been predicting. In the eurozone, the index came in at 51.1, down from 51.4 in August.
Annalisa Piazza at Newedge Strategy said: This is the first modest decline since April as business confidence has gained some momentum over the summer months and it posted its third consecutive above-50 reading in Sept.
Today's slight decline should be seen as a sign that the EMU gradual improvement in activity is not gaining much momentum. That said, the above-50 reading is still consistent with a slight pick up in third quarter GDP.
In Germany, the PMI dipped to 51.1 in September from a 25-month high of 51.8 in August. There were also declines in three of the eurozone's more troubled countries down to 50.8 from a 27-month high of 51.3 in Italy, and down to 50.7 from 29-month high of 51.1 in Spain.
Greek manufacturing expansion fell to 47.5 from 44-month high of 48.7 but the rate of decline has slowed markedly recently.
Meanwhile, France's PMI edged up to 49.8 from 49.7 in August. Howard Archer at IHS Global Insight said: The overall impression is that the eurozone is gradually establishing recovery after exiting prolonged, albeit shallow, recession in the second quarter when GDP grew 0.3% quarter-on-quarter.
Looking ahead, the hope for manufacturers is that currently improving confidence in most Eurozone countries will encourage businesses to invest more, and also encourage consumers to spend more, particularly on durable goods.
The European Central Bank is highly unlikely to act on interest rates at its 2 October meeting given further overall improvement in eurozone September surveys. However, the ECB may become increasingly concerned if the euro climbs further after recently strengthening to a seven-and-a-half month high around $1.355.
Furthermore, the ECB is very aware that Eurozone recovery is in its infancy and far from robust. so it is odds-on that the bank at its October meeting will reiterate its forward guidance that it "expects the key ECB interest rates to remain at present or lower levels for an extended period of time."
Meanwhile, the ECB appears to be increasingly contemplating the provision of more liquidity through another long-term refinancing operation to help credit markets.
Eurozone unemployment was steady at 12% in August after a downward revision to July's figure of 12.1%, but Italy's jobless rate rose to 12.1% to 12.2% but youth unemployment hit a new all time high of 40.1% from 39.7%.
theguardian.com
The Markit/CIPS index for Britain fell from 57.1 in August to 56.7 last month, slightly lower than the expansion to 57.3 economists had been predicting. In the eurozone, the index came in at 51.1, down from 51.4 in August.
Annalisa Piazza at Newedge Strategy said: This is the first modest decline since April as business confidence has gained some momentum over the summer months and it posted its third consecutive above-50 reading in Sept.
Today's slight decline should be seen as a sign that the EMU gradual improvement in activity is not gaining much momentum. That said, the above-50 reading is still consistent with a slight pick up in third quarter GDP.
In Germany, the PMI dipped to 51.1 in September from a 25-month high of 51.8 in August. There were also declines in three of the eurozone's more troubled countries down to 50.8 from a 27-month high of 51.3 in Italy, and down to 50.7 from 29-month high of 51.1 in Spain.
Greek manufacturing expansion fell to 47.5 from 44-month high of 48.7 but the rate of decline has slowed markedly recently.
Meanwhile, France's PMI edged up to 49.8 from 49.7 in August. Howard Archer at IHS Global Insight said: The overall impression is that the eurozone is gradually establishing recovery after exiting prolonged, albeit shallow, recession in the second quarter when GDP grew 0.3% quarter-on-quarter.
Looking ahead, the hope for manufacturers is that currently improving confidence in most Eurozone countries will encourage businesses to invest more, and also encourage consumers to spend more, particularly on durable goods.
The European Central Bank is highly unlikely to act on interest rates at its 2 October meeting given further overall improvement in eurozone September surveys. However, the ECB may become increasingly concerned if the euro climbs further after recently strengthening to a seven-and-a-half month high around $1.355.
Furthermore, the ECB is very aware that Eurozone recovery is in its infancy and far from robust. so it is odds-on that the bank at its October meeting will reiterate its forward guidance that it "expects the key ECB interest rates to remain at present or lower levels for an extended period of time."
Meanwhile, the ECB appears to be increasingly contemplating the provision of more liquidity through another long-term refinancing operation to help credit markets.
Eurozone unemployment was steady at 12% in August after a downward revision to July's figure of 12.1%, but Italy's jobless rate rose to 12.1% to 12.2% but youth unemployment hit a new all time high of 40.1% from 39.7%.
theguardian.com
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