The Eurozone Flash Manufacturing PMI was at 46.0 in September, up from 45.1 in August. But a number below 50 still means activity is contracting.
More details from the September Flash Eurozone PMI release:
"The Markit Eurozone PMI® Composite Output Index fell from 46.3 in August to 45.9 in September, according to the preliminary ‘flash’ reading, based on around 85% of usual monthly replies. The index therefore signalled that the private sector economy contracted for the twelfth time in the past 13 months, with the rate of decline accelerating slightly to reach the fastest since June 2009. The September reading rounds of the weakest quarter since the second quarter of 2009, with the average PMI reading for the third quarter at 46.2, down from an average of 46.4 in the second quarter."
Chris Williamson, Markit's Chief Economist, mentioned that the rate of contraction in Germany eased in September, but the "rate of decline accelerated markedly in France." You can see the divergence on the chart below. So the Eurozone is experiencing a double dip hard economic landing.
“Some good news came from an easing in the rate of contraction in Germany, though the rate of decline accelerated markedly in France and a deepening downturn was also evident in the periphery. It remains too early to say, however, whether Germany will continue to buck the trend, especially as it continued to see a strong rate of loss of new orders in both manufacturing and services.”
I broke out Spanish and Italian economic data in August that were pretty bad. Spain is dealing with both deleveraging (via a housing crash and a sovereign debt/banking crisis, with the hope that the European Central Bank and bailout funds save the day. In my next post I'm going to chart out EUR/USD and the ETFs of Spain, Italy, France, and Germany to see how they are reacting to economic data and the ECB. It looks like Spain's ETF (EWP) is up 50% from the low in July.