- Markit
Manufacturing industry in Germany declined in September for the first time in 14 months, as new orders dropped at producers, which have tight links with Russian market, while they suffer from economic sanctions. Despite jumping industrial production, analysts doubt in ability of European largest economy to become the growth engine this quarter. The Purchasing Managers' Index for this particular sector fell to 49.9 points, below the threshold of 50 points, which indicates decreasing activity. Nevertheless, German factories do not lay-off staff for the time being, hoping for reverse of negative trend in the nearest future.
At the same time, activity in production sector of Italy, the third largest economy of the currency union, rebounded unexpectedly last month, as the PMI Index climbed to 50.7 points, thus returning to green territory after weak month in August. Economists, however, forecasted a continuation of downtrend in Italian manufacturing, being that country struggles to gain growth momentum. Additionally, pan-European gauge for evaluating activity in manufacturing is swinging between gains and losses, as it decreased to 50.3 points in September, the lowest reading since July 2013. Among the most influencing factors, new orders slumped for the first time in a year due to weak demand both inside the European Union and abroad.
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