European manufacturing PMI data is out Wednesday, with especially bad numbers in Germany.
The German manufacturing PMI dropped to 49.9 in September from 51.40 in August. Anything below 50 signals contraction.
This is the first sub-50 score since the middle of 2013, when the Eurozone was still in recession.
Germany has been the reliable industrial powerhouse of the Eurozone economy since 2008, but Wednesday’s figures show that the manufacturing sector is shrinking.
Here’s the chart:
The Eurozone is still hovering just above the 50 mark, at 50.3. That’s still the worst score in 15 months.
Other European PMI scores reflect a strange role reversal: Spain, one of the worst-damaged economies in the Eurozone, saw the highest score at 52.6. And struggling Italy climbed to 50.7.
In France, manufacturing PMI fell to 48.8, meaning the two largest economies using the euro are now reporting shrinking manufacturing. The UK’s figure is still above 50, but at 51.6, it’s a 17-month low for Britain.
Markit’s chief economist Chris Williamson painted a grim picture: “The euro area’s manufacturing economy has lost the growth momentum seen earlier in the year, lurching closer to stagnation.”
He added that the figures are only going to put more pressure on European Central Bank president Mario Draghi: “The weakening manufacturing sector will intensify pressure on the ECB to do more to revive the economy and no doubt strengthen calls for full-scale quantitative easing.”