In September, the eurozone's private sector experienced its first contraction in seven months, driven by simultaneous declines in Germany, France, and Italy for the first time in 2024, according to data from S&P Global released on Thursday.
The HCOB composite output index dropped to 49.6 in September, down from a three-month high of 51.0 in August. The preliminary estimate had been slightly lower at 48.9.
This indicates a slight decrease in private sector activity. At the sector level, conditions deteriorated further as manufacturing output saw its sharpest decline this year, while growth in services slipped to its lowest in seven months.
The final services Purchasing Managers' Index fell to 51.4 from 52.9 in August, a smaller decline than initially estimated. The early figure had been 50.5.
Private sector firms reported the fastest reduction in new business since January. Export sales were particularly weak, with the steepest drop in incoming orders from international clients since last December.
Volume of outstanding work decreased again, continuing the current trend of backlog depletion, now lasting for a year and a half. Firms reduced staff numbers, with the rate of job losses matching the highest since December 2020. Business confidence weakened for the fourth consecutive month.
Cost pressures eased significantly across the eurozone. Input cost inflation continued to slow, and output prices rose only modestly.
Germany, France, and Italy, the three largest economies in the euro area, all reported month-on-month declines in business activity.
Germany's private sector output fell for the third consecutive month at its fastest pace since February. The HCOB composite output index hit a seven-month low of 47.5, down from 48.4 the previous month. The initial estimate was 47.2.
Germany's services PMI was in line with the preliminary estimate, slipping to 50.6 from 51.2.
In France, activity contracted again in September, partly due to a reversal from August's boost related to the Paris Olympic Games. The composite output index fell below the neutral 50.0 mark to 48.6 from 53.1 in August. The initial estimate was 47.4.
France's services PMI fell less than anticipated, decreasing to 49.6 in September from 55.0 in August. The early figure was 48.3.
Italy saw its first monthly decline of the year, though the rate was only slight. The composite output index stood at 49.7, down from 50.8 in August. The services index edged down to 50.5 from 51.4 the previous month.
Contrarily, Spain's private sector grew at its fastest pace in four months during September, with both manufacturing and services sectors expanding. The composite output index climbed to 56.3 from 53.5 in August. The services sector experienced its strongest growth since April 2023, with the activity index rising to 57.0 in September from 54.6 in the prior month.