Eurozone flash PMIs likely to have edged higher in September

Euro area’s PMIs for September are expected to have rebounded slightly with improvement in German services. According to a Societe Generale research report, the September flash PMIs for the currency bloc are likely to have modestly improved from the August prints. Looking at the breakdown, the manufacturing print is expected to have remained stable.

The German manufacturing PMI is likely to come in weaker, consistent with global trends and recent weak output data. The French manufacturing PMI is likely to have risen a tad; however, it might continue to be lower than the breakeven mark. The picture is expected to be positive in the services sector.

Meanwhile, the German print is expected to have rebounded strongly, with the August decline attributable to holiday-related weakness, stated Societe Generale. Domestic conditions, labor market in particular, continue to be strong. The French print is expected to remain at a relatively healthy level as well, with the recent INSEE survey figures for services remaining above the long-term average over the summer.

“Overall, our forecast of 53.5 for the composite PMI is consistent with GDP growth of 0.4 percent qoq in 3Q which is in line with our expectations”, added Societe Generale.