Eurozone slumps as France offsets German improvement

The closely-watched Composite Purchasing Managers Index (PMI), a survey of 5,000 eurozone businesses compiled by Markit research firm, came in at 46.1 for September, up from an initial reading of 45.9 but down from 46.3 in August.

The survey put services alone at 46.1 in September, better than the preliminary estimate of 46 but well short of 47.2 in August, with the sector downturn accelerating to the fastest pace since July 2009, Markit said.

Any reading below 50 indicates a contraction in activity, with the latest figures in negative territory for an eighth month.

The average PMI reading for the third quarter was 46.3, down from 46.4 in the second and the worst outcome since the three months to June 2009, signaling that the 17-nation eurozone economy has likely contracted further.

While Germany edged closer to stabilization, “the real causes of concern were France and Spain, which saw accelerated downturns,” Markit said, noting that the French month-on-month fall “was among the sharpest in its history.”

“The final eurozone PMI came in slightly better than the flash estimate but still signaled one of the steepest monthly downturns seen over the past three years,” Chris Williamson, Markit chief economist said in a statement.

“It seems inevitable that the region will have fallen back into recession in the third quarter,” Williamson said.

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