Eurozone PMI is not as bad as it seems at first gl

Aihuicha, September 1st: Cyrus de la Rubia, chief economist at Hamburg Commerzbank: the euro zone manufacturing PMI data is not as bad as it seems at first glance. Clearly, the headline PMI fell to 43.5, pointing to a fairly pronounced weakness in the sector. However, all 12 sub-indices rose or were largely unchanged, suggesting that the downward trend of the past few months is starting to lose steam across the board. Even with output falling sharply over the past five months, companies are reluctant to make large-scale layoffs. That doesn't bode well for productivity or output per capita, but it provides some stability to the economy as a whole since people aren't losing income. The driver of the downturn is the destocking cycle. However, there are early signs that the process is drawing to a close, as companies have slowed down purchases of inventories in August.