The French economy is driving Europe

It is preliminary PMI day in Europe, meaning we are getting the first read on growth across the European Union in September.

Germany missed growth forecasts for a second consecutive month due to weaker than expected service sector growth, but still posted decent numbers overall. France performed far better than expected, while the eurozone as a whole disappointed slightly.

Here are the headline numbers from across the EU (anything above 50 signals growth in activity, while anything below means contraction):

  • Composite: 52.6 — a slight miss against an estimate of 52.8, which was itself marginally below August’s 52.9 reading.
  • Manufacturing: 52.6 — a beat on forecasts of 51.5, and up from 51.7 in August
  • Services: 52.1, against a forecast reading of 52.8, which was August’s reading.

The EU’s flash figure for overall growth in September suggests the economy is growing at slowest pace in moe than 20 months. It comes off the back of August’s numbers, which put growth at its fastest level in seven months.

Financial data company IHS Markit is behind the PMI figures and Rob Dobson a senior economist at IHS Markit, says in a statement:

“The eurozone economy ended the third quarter on a disappointing note, with its rate of expansion easing to a 20-month low in September. While the underlying picture remains one of sluggish growth of close to 0.3% over the quarter as a whole, it also remains clear that the economic upturn is still fragile and failing to achieve any real traction.”

And here are the breakout readings from Germany and France, the two most powerful states in the single currency area:

  • France Composite: 53.3 — a big beat on last month’s 51.9 reading, and way above the 51.4 expected.
  • France Manufacturing: 49.5 — ahead of forecasts of 48.4, and above the 48.3 reading from August.
  • France Services: 54.1 — again, well above consensus of 52, and August’s 52.3 reading
  • Germany Composite: 52.7 — below August’s 53.3 reading, and expectations of 53.4.
  • Germany Manufacturing: 54.2 — well above consensus, which saw a reading of 53.1.
  • Germany Services: 50.6 — just expanding, but well below the 52.1 reading expected.

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