September was a month to forget for the Eurozone as survey data released yesterday shows growth in the manufacturing sector was at a 14-month low over the month.
The purchasing managers index (PMI) compiled by Markit scored a 50.3. A score above 50 indicates growth but this very weak growth suggests the Eurozone economy is at serious risk of a new recession.
France, dubbed “the new sick boy of Europe” by some, saw a fifth month of contraction in manufacturing as the unfortunate name looks set to stick. France’s PMI was 48.8, a rise from August’s 46.9 but still below 50.
Meanwhile, Germany registered 49.9, its first score below 50 for 15 months. The economy contracted by 0.2 per cent in the second quarter (April to June) so this adds to the fear that the Eurozone’s largest economy is in recession again.
The news comes just in time for today’s policy decision by the European Central Bank where they are set to announce much awaited details of an asset purchase programme.
This would involve creating new bank reserves to purchase assets but the programme is expected to be limited until after a second round of cheap loans to banks in December.
The euro has fallen to low values over the last month as central banks on either side of the Atlantic look set to diverge.