Euro zone manufacturing activity slows in September

Euro zone manufacturing activity slowed in September as the Markit's purchasing managers' index (PMI) of activity dropped to 48.5 in September compared to 49 in August. This is a clear indication of contraction as any reading lower than 50 indicates contraction. This is the fastest contraction of the 17 nation euro zone in last two years.

The current euro zone debt crisis is getting worse with falling demand and business activity. The lower demand is the main reason behind the fall in manufacturing activity. This lower manufacturing activity data increases the possibility of another recession in the whole euro zone. Greece-s default will definitely intensify the same with more pain and slowdown in economic activity. The manufacturing activity also contracts in China and India while it increased marginally in USA.