"Financial data company Markit said its preliminary survey
of purchasing managers in the 17-nation euro zone fell into
contraction territory – a reading below 50 – this month, marking the first
reading in contraction territory since the euro zone climbed out of recession in
the third quarter of 2009, and raising new fears of a double-dip. Below,
economists react.
The fall in the euro-zone composite PMI below the theoretical 50 “no-change” barrier provides the strongest sign yet that the region is on the cusp of recession. … [T]he latest figures support our view that the consensus outlook for growth is far too optimistic – we continue to expect a fall in euro-zone GDP of about 0.5% next year. – Ben May, Capital Economics
The employment sub-indices for manufacturing and services both weakened in September but remained above the 50 level, at 51.3 on both. However, this appears to reflect surprising strength in the German employment sub-indices this month, which we suspect may not last given the deterioration in economic conditions. – Ken Wattret, BNP Paribas
The data imply that the manufacturing sector is set to experience recession, given that the quarterly average of the euro area PMI for Q3 was at 49.2 (vs. 54.9 in Q2) and given the sharp further deterioration in the gap between new orders and finished goods inventories, which we consider to be a leading indicator. – Barclays Capital Economic Research
The marked weakening in euro-zone economic activity since the early months of the year shows no sign of easing, and it is evident that the previously buoyant manufacturing sector is suffering markedly. – Howard Archer, IHS Global Insight
Today’s PMIs will probably increase pressure on the ECB to cut rates soon. However, barring a further significant escalation of market tensions, we still believe that they are unlikely to deliver on the rate front, as their response at this stage will probably consist in stepping-up unconventional measures. – Marco Valli, Unicredit Research"
at http://blogs.wsj.com/economics/2011/09/22/14770/?mod=WSJBlog
The fall in the euro-zone composite PMI below the theoretical 50 “no-change” barrier provides the strongest sign yet that the region is on the cusp of recession. … [T]he latest figures support our view that the consensus outlook for growth is far too optimistic – we continue to expect a fall in euro-zone GDP of about 0.5% next year. – Ben May, Capital Economics
The employment sub-indices for manufacturing and services both weakened in September but remained above the 50 level, at 51.3 on both. However, this appears to reflect surprising strength in the German employment sub-indices this month, which we suspect may not last given the deterioration in economic conditions. – Ken Wattret, BNP Paribas
The data imply that the manufacturing sector is set to experience recession, given that the quarterly average of the euro area PMI for Q3 was at 49.2 (vs. 54.9 in Q2) and given the sharp further deterioration in the gap between new orders and finished goods inventories, which we consider to be a leading indicator. – Barclays Capital Economic Research
The marked weakening in euro-zone economic activity since the early months of the year shows no sign of easing, and it is evident that the previously buoyant manufacturing sector is suffering markedly. – Howard Archer, IHS Global Insight
Today’s PMIs will probably increase pressure on the ECB to cut rates soon. However, barring a further significant escalation of market tensions, we still believe that they are unlikely to deliver on the rate front, as their response at this stage will probably consist in stepping-up unconventional measures. – Marco Valli, Unicredit Research"
at http://blogs.wsj.com/economics/2011/09/22/14770/?mod=WSJBlog
