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.
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
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
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Reporting by Sumanta Dey; Editing by Toby Chopra; email@example.com; +91 80 6749 4836; Reuters; Messaging: firstname.lastname@example.org