Euro zone manufacturing PMI falls to 51.1 in September

Manufacturing activity in the euro zone expanded at a slower rate than expected in September, while activity in the services sector improved at the fastest pace in 27-months, preliminary data showed on Monday.

In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index fell to a seasonally adjusted 51.1 in September from a final reading of 51.4 in August.

Analysts had expected the index to inch up to 51.8 in this month. 

On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

The report also showed that service sector activity in the euro zone improved to the highest level since June 2011 in September.

The preliminary services purchasing managers’ index rose to a seasonally adjusted 52.1 this month from 50.7 in August, above expectations for an increase to 51.1. 

Commenting on the report, Chris Williamson, Chief Economist at Markit said, “The overall rate of growth signaled by the Eurozone PMI remains modest, consistent with gross domestic product rising by a meager 0.2% in the third quarter.” 

He added that, “Policymakers at the ECB will no doubt view it as too early to change their stance on keeping policy on hold for an extended period.”

Following the release of the data, the euro was modestly lower against the U.S. dollar, with EUR/USD inching down 0.09% to trade at 1.3511.

Meanwhile, European stock markets were mostly lower after the open. The EURO STOXX 50 shed 0.25%, France’s CAC 40 was flat, London’s FTSE 100 slumped 0.25%, while Germany's DAX edged 0.1% lower.