Manufacturing activity in the European zone remained mired in a deep and wide-ranging decline last month, based on surveys showing demand continued to shrink at a pace rarely seen since data were first collected in 1997.
The European zone's Purchasing Managers' Index (PMI), compiled by S&P Global, slipped to 43.4 in September from 43.5 in August, matching earlier estimates. A reading below 50 indicates decreased activity.
The index measuring output, which contributes to the composite PMI due on Wednesday and is considered a good indicator of economic health, fell to 43.1 from 43.4.
"The manufacturing PMI was well below 50 throughout the third quarter, so we feel pretty confident that the slowdown in manufacturing will continue this period," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
The new orders index did increase last month, to 39.2 from 39.0 in August, but it remained below the cyclical level.
The decline in demand occurred even as the three-month average of prices charged by factories decreased faster than at any time in the history of the study other than during the Great Recession in 2008/2009, added Cyrus de la Rubia HCOB.
Policymakers at the European Central Bank who have so far failed to bring inflation back to target will likely welcome news of a price cut.
Last month, they raised their interest rates for the 10th time in a row and signaled that they may be done raising rates until at least July next year, according to economists in a Reuters poll.
