French Private Sector Growth Improves In September

While it marks in improvement on last year’s growth, the data points to 1.6 per cent annual growth this year, which Williamson says is still below the pace regarded as the Eurozone’s long-term potential.

This resulted in fewer new jobs and also forced factories to reduce output, even though companies raised prices for the first time in over four years.

Markit’s flash purchasing managers’ index (PMI) scored 53.9 for this month, down slightly from August but still above the 50 score that implies no growth and in line with economic growth.

A Reuters poll had predicted a dip to 54.1.

“The French private sector eked out another month of modest growth in September, with manufacturing making a meaningful contribution to expansion for the first time in well over a year”, Jack Kennedy, a senior economist at Markit, said. All eyes are on this report as Bloomberg surveys predict crude oil stocks to decline by 1.65 million barrels a day for the week ending September 18.

“The European Central Bank would no doubt like to see more bang for their euros as far as stimulus from their QE program is concerned”, said Chris Williamson, chief economist at London-based Markit Economics.

Fears of China’s economy cooling rapidly, coupled with authorities there devaluing the currency, spooked financial markets last month. Employment rose for an eleventh straight month, although the rate of job creation eased to an eight month low as many firms focused on boosting productivity. Stocks and commodities both fell. Backlogs of work rose to the highest since mid-2011.

The euro-area economy probably maintained its 0.4 percent rate of expansion in the third quarter and will continue to grow amid rising orders and backlogs of work, according to Markit Economics.

But there were signs that business growth could pick up speed, Williamson added.

Wednesday starts with a major economic report coming out overseas – the Eurozone Manufacturing PMI numbers due at 4 a.m. ET.