Euro-zone composite PMI falls, signals contraction (by William L. Watts)
FRANKFURT (MarketWatch) -- The preliminary euro-zone composite purchasing managers index fell to 49.2 in September from 50.7 in August, signaling the first contraction in private-sector activity across the 17-nation region in more than two years, Markit Economics reported Thursday. A reading of less than 50 indicates a contraction in activity, while a figure of more than 50 signals growth. The euro-zone manufacturing PMI fell to 48.4 from 49.0 in August, while the September services PMI dropped to 49.1 from 51.5. "The flash PMI indicates that the euro-zone economy probably stagnated in the third quarter, having slipped into contraction for the first time in just over two years in September," said Chris Williamson, chief economist at Markit. Forward-looking indicators, including an increased rate of decline of incoming new business and falling confidence about the year ahead in the service sector, "raise the risk of further contraction in the coming months," he said.