Eurozone composite PMI hits 20-month low; growth slows in Germany, Italy and Spain

Markit's final composite Purchasing Managers' Index for the euro zone released earlier today showed that Eurozone business activity in September expanded at its weakest rate since the beginning of 2015 last month. The final Markit Eurozone PMI Composite Output Index posted 52.6 in September, down from 52.9 in August and matching the earlier flash estimate. The average index reading during the third quarter as a whole was at 52.9, the weakest since the final quarter of 2014.

Growing caution seen about the economic outlook and political uncertainty as Britain gears up to start exit proceedings from the European Union and Germany and France face elections. A mild acceleration in France was offset by declines in Germany, Italy, Spain and Ireland.

Average input costs rose for the sixth consecutive month in September. The rate of increase however, remained well below the long-run survey average. Input price inflation accelerated in each of the ‘big-four’ nations. Average selling prices halted 11-month of declines and remained unchanged.

“While we see the eurozone economy expanding by 1.6% in 2016, even this modest growth is looking unattainable in 2017 given the heightened political uncertainty that lies ahead." said Chris Williamson, Chief Business Economist at IHS Markit.