The eurozone manufacturing sector fell deeper into contraction territory as demand tumbled further and price pressures intensified, according to PMI data from S&P Global released on Monday.
The Eurozone Manufacturing PMI was revised downwards to 48.4 in September from a preliminary reading of 48.5 and below 49.6 in August, marking a further worsening of operating conditions for euro area goods producers.
“Demand for eurozone goods sank sharply in September as high inflation and economic uncertainty reportedly squeezed client appetite. Business confidence subsequently fell to its lowest level since May 2020, leading firms to cut purchasing activity further in anticipation of more challenging conditions,” it said.
Meanwhile, inflationary pressures were on the rise in September.
Although pressures arising from material shortages had reportedly faded slightly, many companies remarked on rising energy costs.
Commenting on the final Manufacturing PMI data, Chris Williamson, a chief business economist at S&P Global Market Intelligence, said: “The ugly combination of a manufacturing sector in recession and rising inflationary pressures will add further to concerns about the outlook for the eurozone economy.”
“Excluding the initial pandemic lockdowns, eurozone manufacturers have not seen a collapse of demand and production on this scale since the height of the global financial crisis in early-2009,” he underlined.