LONDON, Oct 2 (Reuters) – Eurozone manufacturing remained in a deep and widespread recession last month, a survey showed on Monday, but it has not been surpassed since 1997, when data was first collected. It has become clear that demand continues to shrink at an almost negligible pace. .
The final HCOB Eurozone Manufacturing Purchasing Managers Index (PMI) compiled by S&P Global was 43.4 in September, down from 43.5 in August and in line with preliminary figures. A reading below 50 indicates a reduction in activity.
The index, which measures output and is reflected in the composite PMI to be released on Wednesday and is considered a good indicator of economic health, fell to 43.1 from 43.4.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: “The output PMI remained well below 50 for the entire third quarter, giving us considerable confidence that the manufacturing downturn has continued for the period.” said.
“In the race to the bottom, France and Germany lead the way in the September PMI, while Spain and Italy are coming through a little less hurt.”
Last month’s new orders index was 39.2, up from 39.0 in August, but still below the break-even point.
HCOB’s De La Rubia said this demand decline comes even though the three-month average of prices charged by factories has fallen more rapidly than at any point in the study’s history other than the Great Recession of 2008-2009. It added that there had been a decline.
European Central Bank policymakers, who have so far failed to get inflation back on target, may welcome news of falling prices.
Economists polled by Reuters said the 10th consecutive hike in key interest rates last month is likely already done and will remain unchanged until at least July next year.
Report by Jonathan Cable.Editing: Hugh Lawson
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