Eurozone manufacturing PMI falls in September

S&P Global's Eurozone manufacturing purchasing managers' index fell to 48.5 in September from 49.6 a month earlier, according to preliminary estimates.

September's preliminary reading pointed not only to a third straight monthly contraction in factory activity but also to the biggest drop since June 2020.

Production fell for a fourth straight month, weighed down by surging energy prices, while inflows of new orders fell for a third month in a row amid higher costs of living.

In terms of prices, energy prices offset improved raw material availability, leading to another acceleration in input prices.

Looking forward, the EZ PMI also hinted at a dire outlook for the bloc, with participants in the survey pointing to rising interest rates, Russia's war in Ukraine, and destocking.

S&P Global said: "A eurozone recession is on the cards as companies report worsening business conditions and intensifying price pressures linked to soaring energy costs.

"The early PMI readings indicate an economic contraction of 0.1% in the third quarter, with the rate of decline having accelerated through the three months to September to signal the worst economic performance since 2013, excluding pandemic lockdown months."

Elsewhere, the services PMI dropped from 49.8 in August to 48.9, a 19-month low, while the composite output index dropped to a 20-month low of 48.2 as the EU's economic downturn deepened.

Reporting by Iain Gilbert at Sharecast.com