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Business activity in the Eurozone continued to improve in September, but failed to sustain the growth in new orders reported in August, early data from S&P Global showed on Tuesday. The Hamburg Commercial Bank flash eurozone composite purchasing managers’ output index rose to 51.2 points in September from 51.0 in August, slightly ahead of the FXStreet-cited consensus for a 51.1-point reading. This indicates further improvement from the neutral 50-point mark which separates growth from contraction, and the fastest rate of acceleration in the last 16 months. Services grew at their fastest rate in 9 months, according to a September flash reading of 51.4 points, up from 50.9 points in August and ahead of the 50.4-point consensus. The flash estimate for manufacturing slid into decline at 49.5 points, after remaining broadly stable at 50.7 points the month prior. This was against the FXStreet consensus to edge up to 50.9 points. Manufacturing output decreased slightly to 50.7 points from 52.5 points the previous month, while purchasing activity among manufacturers fell at the sharpest rate since March. Inventory depletion continued, albeit at a slightly slower rate than in August, as delivery times continued to lengthen. New orders showed no change, after growing the month prior. Overall employment rates held steady, ending a six-month hiring streak, and though new staff numbers continued to rise in the service sector, the pace of growth was at its slowest in seven months. Manufacturing employment continued to decrease. Inflation eased in September, according to S&P Global, thanks to slower growth of input costs, which were below the series average, and the softest rise in output prices seen since May. Still, business confidence hit a four-month low, S&P Global said, driven by pessimism in manufacturing, though firms ‘remained optimistic that output will rise over the coming year.’ ‘Confidence weakened in Germany and France, but improved across the rest of the single-currency bloc,’ S&P Global added. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted a ‘cloudy’ manufacturing outlook: ‘Production is still growing, but the pace is being dragged down by France, where the government shake-up in early September likely threw a wrench into companies’ production plans. Apart from this, hopes for an acceleration in growth are not justified as new orders have dropped significantly in both Germany and France. In the medium term, higher defence spending could drive up demand for industrial goods. ‘Cost inflation in the services sector, which the European Central Bank watches closely, has eased slightly but remains unusually high given the fragile economic backdrop. Selling prices have cooled more noticeably, which might just prompt the ECB to consider whether a rate cut before year’s end could be back on the table.’ The PMI features a panel of 5,000 companies based in the euro area manufacturing and service sectors, with responses collected between September 11 and 19. Final September data for manufacturing will be out on October 1, with services and composite indicators to be published on October 3. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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