The eurozone services purchasing managers’ index (PMI) slipped again to 47.6 (contraction) against expectations for a figure of continued expansion near to 51. The eurozone manufacturing PMI, however, staged an upside surprise rising to 53.7 against forecasts of 51.5. No surprise that the overall composite PMI therefore fell to a just expansionary 50.1 from 51.9 in August as services make up such a large part of the overall result. It should be of little surprise though, despite analysts’ more upbeat expectations, as eurozone nations struggle to halt the resurgence of coronavirus cases, leading to a more circumspect consumer. It seems a ‘W’ shaped economic projection might be developing following the brief bounce in PMI numbers over the summer. What this means is that continued stimulus across the eurozone will be hopefully forthcoming – or at least that is what markets are placing their bets on.
The UK, in contrast, saw continued expansion across both services and manufacturing with figures of 55.1 and 54.3 respectively albeit both slightly less than what was reported last month. Further restrictions imposed by Prime Minister Boris Johnson on 22 September will likely see the UK follow a similar trajectory as the eurozone going forward. We expect a temporary peak in the UK PMI numbers.