|Composite - Level||53.9||53.6||54.3|
|Services - Level||54.0||53.7||54.4|
Eurozone economic growth was marked down just slightly in the final PMI data for September. At 53.6, the composite output index was 0.3 points short of its flash estimate but, rather more worryingly, 0.7 points below its final August reading.
The flash service sector PMI was similarly marked 0.3 points lower and, at 53.7, now stands also 0.7 points under its final mid-quarter outturn. However, growth of new orders actually accelerated slightly, backlogs were up more sharply than in any other month over the last four years and business expectations remained positive. Employment expanded for an eleventh straight month but at its slowest rate since January. Cost pressures were again subdued but service sector charges rose marginally and so ended the unbroken sequence of decline that started late in 2011.
Regionally, the best performer in terms of composite output was Ireland (59.5 but a 16-month low) ahead of Spain (54.6) and Germany (54.1). Italy (53.4) also had a moderately respectable month but France (51.9) again lagged well behind despite registering a 3-month high.
The minor downward revision to the composite output index still leaves the economy on course for third quarter growth around the 0.4 percent mark. Spain looks to have had a very good quarter and Germany probably matched the expected Eurozone rate. Italy should not be far behind but France probably struggled to better 0.2 percent. If so, underlying pressure on Eurozone prices should remain very limited and leave the HICP inflation rate comfortably short of its near-2 percent target for a long while yet.
The Eurozone Composite PMI is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 manufacturing and services firms. National manufacturing data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland.
The Eurozone Services PMI (Purchasing Managers' Index) is produced by Markit and is based on original survey data collected from a representative panel of around 2,000 private service sector firms. National data are included for Germany, France, Italy, Spain and the Republic of Ireland. These countries together account for an estimated 80% of Eurozone private sector services output.
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.
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