Eurozone manufacturing steadies at lows

BRUSSELS: Eurozone manufacturing activity was in the doldrums again in September but showed signs of bottoming out with a slight increase overall from August, data showed on Monday.

The Purchasing Managers Index (PMI), a survey of thousands of eurozone manufacturers compiled by Markit research firm, came in at 46.1 for September, up from the preliminary reading of 46.0 in September and compared with 45.1 in August.

Figures below the 50 boom or bust line show activity is contracting and September's data marked the 14th negative month in a row overall, Markit said.

"Despite seeing some easing in the rate of decline last month, manufacturers across the euro area suffered the worst quarter for three years in the three months to September," said Chris Williamson, Markit chief economist.

"Output, order books and exports all continued to fall at steep rates in September, causing firms to cut their staffing levels once again," he added.

Separately Monday, Eurostat figures showed a sharp jump in the eurozone jobless numbers to a record 18.2 million in August, reflecting the impact of the economic slowdown.

Williamson said recent data all pointed in the same direction -- recession.

"It ... seems inevitable that the region will have fallen back into a new recession in the third quarter," he said, even while noting some encouraging signs that the worst of the downturn may be over.

Among the major eurozone economies, Germany on 47.4, Italy at 45.7 and Spain 44.5 were all on six-month highs but France with 42.2 was at a 41-month low, with production and new orders falling more sharply.

Only two of the 17 eurozone nations were in positive territory -- Ireland with 51.8 and the Netherlands at 50.7.

Howard Archer of IHS Global Insight said that despite the slight improvement in September, the report "is still very weak and reinforces belief that the eurozone suffered further (economic) contraction in the third quarter."

He said he expected the eurozone economy to shrink 0.3-0.4 percent sequentially in the third quarter after a contraction of 0.2 percent in the second.