Earlier this morning, Markit published its Flash Eurozone PMI, a key indicator of economic activity. And it was ugly. The composite index fell to 45.9 from 46.3 in August. This is a 39-month low.
The services sub-index was at a 38-month low of 46.0.
However, manufacturing Flash PMI climbed to 46.0, which is a 6-month high.
From Markit Chief Economist Chris Williamson:
“The Eurozone downturn gathered further momentum in September, suggesting that the region suffered the worst quarter for three years. The flash PMI is consistent with GDP contracting by 0.6% in the third quarter and sending the region back into a technical recession.
“We had hoped that the news regarding the ECB’s intervention to alleviate the debt crisis would have lifted business confidence, but instead sentiment appears to have taken a turn for the worse, with businesses the most gloomy since early-2009 due to ongoing headwinds from slower global growth. This gloom is clearly reflected in headcounts falling at the fastest rate since January 2010 as companies seek to adjust to weaker demand.
Here’s Eurozone PMI overlayed with GDP. Bottom line: it looks like the Eurozone is sinking deeper into recession.
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