October 1, 2015 / 8:22 AM / 3 years ago

Euro zone manufacturing growth dips in September PMI

Oct 1 (Reuters) - Euro zone manufacturing growth weakened slightly last month on the back of a slower pace of new orders and output, even as factories started cutting their prices again to drum up business, a survey showed.

A band-conveyor with iron ore for steel production is seen at Europe's largest steel factory of Germany's industrial conglomerate ThyssenKrupp AG in the western German city of Duisburg March 17, 2010. Picture taken March 17, 2010. REUTERS/Ina Fassbender

The findings, out just a day after official data showed euro

zone inflation slipped below zero again in September, are likely

to pressure the European Central Bank to expand its stimulus

program.

The ECB has bought mostly government bonds worth 60 billion

euros a month since March hoping to boost dangerously low

inflation and anemic growth. But it has had modest success so

far and policymakers have hinted the program could be enhanced

in size or duration if required.

Markit’s final manufacturing Purchasing Managers’ Index was

52.0 last month, the same as a flash reading and the consensus

from a Reuters poll but lower than August’s 52.3. It has been

above the 50 mark that separates growth from contraction for

over two years.

An index measuring output that feeds into a composite PMI,

due on Monday and seen as a good guide to growth, fell to 53.4

from 53.9, lower than the preliminary 53.5 reading.

Growth in new orders from abroad also dipped slightly.

“Despite unprecedented central bank stimulus and substantial

currency depreciation, the manufacturing sector is failing to

achieve significant growth momentum and even risks stalling

again,” said Chris Williamson, chief economist at Markit.

“With prices charged by manufacturers falling at the fastest

rate in seven months amid a rapid descent in input prices,

deflation worries will intensify and put pressure on the ECB to

act more aggressively.”

The sub-index measuring output prices in the euro zone fell

to 48.7 from 50.5 in August, lower than the preliminary 48.8. It

was the first month of reported falling prices since March.

A PMI covering Germany, Europe’s largest economy and home to

some of its best-known manufacturers, fell as well to 52.3 from

August’s 53.3.

Detailed PMI data are only available under license from

Markit and customers need to apply to Markit for a license.

To subscribe to the full data, click on the link below: www.markit.com/Contact-Us

For further information, please phone Markit on +44 20 7260 2454

or email economics@markit.com

Reporting by Sumanta Dey; Editing by Toby Chopra; sumanta.dey@thomsonreuters.com; +91 80 6749 4836; Reuters; Messaging: sumanta.dey.thomsonreuters.com@reuters.net

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