Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) posted 52 points in October this year, down from September’s 53.2 points and remaining almost unchanged compared to the earlier flash estimate of 52.1 points. The euro zone manufacturing PMI fell to a 26-month low.
The latest data showed that the slowdown in growth was broad-based. The regression in overall growth was mainly driven by a fall in overall order books. The decline was recorded in new export orders for the first time in almost five-and-a-half years. In October, business confidence slumped to the lowest level since December 2012 due to trade concerns amongst manufacturers about the development of global trade protectionism measures, potentially higher tariffs and ongoing political uncertainties.
“Concerns about the euro zone manufacturing sector intensified at the start of the fourth quarter. The headline PMI fell to its lowest since August 2016, signalling a further slowing in the rate of expansion. New orders fell into decline for the first time in almost four years as trade woes escalated. Export sales fell for the first time in over five years,” stated Chris Williamson, chief economist at Markit. “Moreover, the survey suggests that the manufacturing sector could contract in the fourth quarter unless the data revive in coming months. However, with backlogs of work falling for a second successive month, and business expectations sliding to the lowest for nearly six years, risks seem firmly tilted towards the downside heading towards the end of the year,” he added.