Eurozone PMI revised a tad lower on weakness in Germany
Activity in the Eurozone's manufacturing sector dropped to a 13-month low in August, according to revised data from survey compiler Markit, as new orders from both inside and outside the single currency area slowed.
Markit referenced "economic and geopolitical uncertainties" as the main factor behind the decline seen in the sub-index for new work.
The headline gauge for the firm's purchasing managers' index (PMI) fell to 50.7, a 13-month low, versus an initial estimate of 50.8 and the previous month's reading of 51.8.
Both the sub-indices for output and new orders dropped to 14-month lows.
The headline figure for the German PMI was revised significantly lower, to 51.4 from a preliminary estimate of 52 (consensus: 52).
The gauge for France's manufacturing sector was actually revised higher, to 46.9 from an initial estimate of 46.5. It was nonetheless far below July's reading of 47.8.
Economists point out weakness in France and Italy
"Once again France and Italy were particular sources for concern [...] the German manufacturing PMI also made uncomfortable reading with activity moderating to an 11-month low, which fuels doubts over how much the economy can grow by in the third quarter following the second quarter GDP contraction of 0.2% quarter-on-quarter," Howard Archer chief economist at IHS Global Insight commented.
The PMI for Italy slipped by just over two points from the preliminary estimate to reach 49.8 (consensus: 51), retreating back to the level of a year ago, led by falls in the output and employment sub-indices.
Economist Chiara Corsa at Unicredit cited the rising geopolitical tensions and the "negative impact of a weaker-than-expected acceleration in global trade on the economic recovery" as the main reasons for the deterioration in sentiment.
For the above reasons the Italian lender is in the process of revising down its forecasts for economic growth in Italy during the third quarter.
AB