Steepest eurozone manufacturing slump in a decade, PMI at 43.0

26 Oct '23

1 min read

Pic: Adobe Stock/KONSTANTIN SHISHKIN

Insights

The eurozone's manufacturing sector continues to struggle, with the PMI output index staying flat at 43.1 and the PMI dropping to 43.0 in October.
The data indicates a seventh straight month of output decline, the worst contraction in a decade if pandemic-related months are disregarded.
The goods-producing sector experienced its deepest slump since 2009.

The eurozone’s flash manufacturing purchasing manufacturers’ index (PMI) output index remained unchanged at 43.1, while the PMI itself hit a 3-month low at 43.0 in October 2023. This marks a seventh consecutive month of declining output in the manufacturing sector, witnessing the steepest rate of contraction in over a decade, pandemic months excluded.

The downturn was broad-based, affecting all sectors, but it was particularly severe in the goods-producing sector. Factories reported the deepest downturn since 2009, barring the early pandemic lockdowns. This continual decline since mid-2022 has been sustained by a persistent drop in new orders. Input prices fell sharply as vendors discounted prices due to supply exceeding demand, S&P Global and Hamburg Commercial Bank (HCOB) said in a joint press release.

France and Germany reported sharper declines than the rest of the eurozone, marking their fifth and fourth consecutive months of falling output, respectively. Overall, the eurozone witnessed its largest drop in output in a year, thanks to a steepening manufacturing downturn. This raises concerns for policymakers as they grapple with a weakening demand environment and inflation pressures.

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