September data on Irish Purchasing Managers Indices is now complete (with Construction sector reporting last), and the signals coming from the data are not pretty:
Services sector activity is back in contraction: September reading of 45.8 shows relatively sharp downward momentum, swinging 6.6 points on August reading. September reading is statistically below 50.0 zero growth line, and below historical mean (55.0).
Manufacturing sector reading is at stagnation 50.0 in September, down from 52.3 in August. Statistically, September reading is below historical average of 51.4.
Construction sector is posting a second consecutive month of contraction at 47.0 in September. The reading is statistically below both the historical mean and the median, as well as below 50.0 zero growth line.
This means that official composite PMI (which does not include Construction sector index) is now at 46.9, statistically signalling economic contraction. September index is statistically below index median, although it is statistically indistinguishable for the historical average (which, owing to massive volatility in recent months sits at 49.8).
Chart above shows my own 3-Sectors Index of economic activity, integrating Manufacturing, Services and Construction sectors PMIs, weighted by their relative contributions to Gross Value Added. 3 Sectors Index has fallen from 52.1 in August to 47.5 in September. August reading by itself was not impressive: it was statistically below the historical average and the median, and was barely statistically significantly above 50.0 zero growth line. September reading is very poor, indicating a return of recessionary dynamics in the Irish economy in a critical month of September that normally marks strong growth month for the economy.
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