Aggressive new policy from the European Central Bank has so far failed to boost ailing euro zone business, according to surveys that showed a widening chasm between sickly France and a more resilient Germany.
Thursday’s purchasing managers indexes (PMIs), which survey thousands of companies worldwide every month, also showed Chinese factory activity wilted for an 11th month in September, as Europe’s troubles continued to hit Asian exporters.
That looks unlikely to improve soon.
While the downturn in Europe’s largest economy, Germany, eased by a surprising amount this month, French firms fell deeper into the mire in September — and at a far faster rate than expected.
A good indicator of economic performance, the composite euro zone PMI fell to 45.9 in September from 46.3 in August.
Below 50 denotes contraction and survey compiler Markit said the surveys were consistent with a roughly 0.6 per cent economic contraction in the third quarter.
The euro zone services PMI fell to 46.0 in September from 47.2 in August, below even the most pessimistic forecast of 46.5 in a Reuters poll of nearly 40 economists. France represented by far the biggest disappointment of Thursday’s PMIs, as both its manufacturing and services PMIs fell beneath the lowest forecasts from 20 economists.
The huge economic uncertainty in Europe has had a pronounced impact on export-reliant economies like China, where manufacturing contracted again in September. The China manufacturing PMI inched up in September to 47.8 from August’s nine-month low of 47.6.
Meanwhile, US manufacturing closed out its weakest quarter in three years this month , suggesting the economic recovery is failing to gain traction. As per Markit the US manufacturing PMI stood at 51.5 in September, unchanged from August. The index averaged 51.5 in the third quarter, below the 54.2 registered between April and June, for its worst showing since the third quarter of 2009.
EU-China summit opens with emphasis on trade
Brussels: A summit meeting Thursday between the leaders of the European Union and the Chinese prime minister opened on a friendly note, with leaders emphasizing the rapidly increasing trade between the two sides. But when the Chinese leader delved into more contentious topics, EU officials cut off the audio feed to reporters at the request of the Chinese delegation. AP