PMI figures show diverging developments

Today, we dive more into the development of market sentiment as Septembers PMI indices were released. The manufacturing sector remains in the contraction zone as manufacturing PMI indices continue to move below the threshold of 50. In Romania (September PMI Index at 47.3) demand continues to be soft as shown by the evolution of the new orders component, which is also affecting the output and employment. External demand continues to be weak and more importantly the German economy does not show any signs of recovery. In Poland and Hungary, PMI indices delivered a positive surprise as they were higher than market expected. In Poland, the footprint was the second highest in over two years amid slower falls in output and new orders. In Czechia, however, the PMI Index dropped to 46 in September weak external conditions remain a major constraint on domestic factory performance. Nevertheless, the three-month moving average trend looks quite promising in Czechia and Poland as it has been moving up lately, as opposed to Germany, where manufacturing PMI peaked in the second quarter and has been falling since then. In Romania, on the other hand, the three-month moving average development mirrors the German one.