The data was collected between October 12 and 24 — before the confidence-eroding Greek referendum announcement.
Conditions in the Eurozone manufacturing sector continued to weaken in October. At 47.1, down from 48.5 in September, the final Markit Eurozone Manufacturing PMI fell to its lowest level since July 2009 and below the flash estimate of 47.3. The PMI has remained below the neutral mark of 50.0 for three months. Signs of weakness are becoming increasingly apparent in the core nations, while the periphery remains mired in recession. German manufacturing, one of the main drivers of the earlier Eurozone recovery, saw its PMI indicate contraction for the first time since September 2009. Rates of decline were the fastest for 27 months in both Austria and the Netherlands, while France signalled deterioration for the third month in a row. Rates of contraction accelerated sharply in Greece and Italy, with the performance of Italy deteriorating significantly compared with the previous month.
New orders declined at Eurozone manufacturers for the fifth month running, and at the fastest pace since May 2009. The sharpest reductions were seen in Greece, Italy and Spain. Weak domestic market conditions and the deteriorating global economic backdrop were the main factors underlying reduced new order inflows.
New export business fell at the quickest pace since June 2009. All of the nations covered by the survey saw new export orders decline, with rates of contraction accelerating in every country except Ireland and the Netherlands. Worryingly, Germany reported the sharpest reduction, as new export orders fell to the greatest extent since mid-2009.
Signalling a marked deterioration in the health of the Italian manufacturing sector in October, the seasonally adjusted Markit/ADACI Purchasing Managers’ Index dipped from 48.3 in September to 43.3. This was the lowest PMI reading since June 2009, and the third successive posting below the neutral mark of 50.0. October’s decline in overall business conditions primarily reflected a steep drop in new business received compared with the previous month. New orders from both domestic and foreign-based clients were down markedly since September, with the latter centred on weaker European demand. Consequently, manufacturers cut output levels at the fastest rate since April 2009.
The seasonally adjusted Markit Purchasing Managers’ Index posted 43.9 in October, to signal a broadly similar deterioration in operating conditions as seen in September (43.7). The PMI has now posted below 50.0 for six months in a row. Spanish manufacturing production decreased sharply again in October, extending the current period of reduction to six months. Where output decreased, this was mainly linked to falling new orders.
The headline Markit Greece Purchasing Managers’ Index read 40.5 in October, down from 43.2 in September, signalling the fourth sharpest deterioration in the operating conditions of Greek manufacturing firms in the survey’s twelve-and-a-half year history.