The PMI data for September saw diverging trends, between sectors and geographies. The composite PMI has been stable in the US in September after rebounding the month before. In the euro area however, the jump in July was shortlived and after the sharp drop in August, September saw another decline, leaving the PMI just above the 50 threshold. This overall number is hiding very diverging trends. In France, the index has dropped to 48.5 (it was at 57.3 two months earlier) whereas in Germany there was only a tiny decline over the same period, leaving the index at 54.7. In the UK, the index dropped in September -probably a reflection of Brexit negotiations uncertainty- though it stays at a high level (56.5). The Brexit effect was far more visible in Ireland where the index dropped from 54.0 to 46.9 in a single month.
Looking at the heatmap for the manufacturing sector, it is clear that it is holding up well. At the global level, the improvement continued in September. The US were stable but the euro area saw a noticeable pick-up with France doing better and Germany powering ahead to 56.4. China has been stable for the past three months at around (53.0 in September).
The services PMI eased slightly in the US in September whereas the euro area saw a considerable decline, to 48.0 on the back of a big drop in France (from 57.3 in July to 47.5 in September). Since July, Spain also saw an important decline to a very low 42.4 in September. All this reflects the impact of the renewed increase of the number of new Covid-19 infections.
Concerning the employment survey for manufacturing, September saw further improvement at the global level and in particular in the euro area. The reading improved in France and Italy whereas Germany and Spain witnessed a bigger increase. However, across countries, in level terms, the impression is more subdued than for the manufacturing PMI as a whole. This suggests ongoing caution of companies in terms of hiring. A similar conclusion applies to the composite PMI.
Finally, the assessment of export orders improved further at the global level. The reading for the euro area saw a big jump to 55.5 in September, driven by Germany. France improved as well, from 48.3 to 51.5. China saw a big increase, from 50.7 to 4.4.
COMPOSITE PMI
MANUFACTURING PMI
SERVICES PMI
PMI MANUFACTURING – EMPLOYMENT
PMI MANUFACTURING – NEW EXPORT ORDERS
