28 September 2001, 17:30  OUTLOOK Euro zone data next week to show negative impact of US attacks on PMI

LONDON (AFX) - Euro zone economic figures due for release next week are expected to show the negative impact of the terrorist attacks against the US on the euro zone manufacturing purchasing managers index, according to economists. Economists said that without the attacks, they would have forecast a moderate increase in the PMI for Steptember as the economy was showing signs of bottoming in the early summer. "However, to account for a possible negative influence of the attacks in the US on purchasing managers' sentiment -- as they filled in the questionnaire after Sept 11 -- we are projecting a modest decline in the PMI," Schroder Salomon Smith Barney economist Jean Mercier said. ABN-AMRO economists agreed that with the increased probability of a US recession and the appreciation of the euro, the manufacturing PMI is likely to register a decline. Economists are predicting a decline in the PMI for the service sector, even if the survey was conducted around Sept 10 and is not expected to show the impact of the attacks. They said the business expectations section of the survey may however already reflect a fall in business confidence that would put paid to the glimmer of improvement that emerged in July. Otherwise, euro zone producer prices for August are expected to fall to its lowest level since Oct 1999, while unemployment for the area is forecast to remain stable, even if some economists are expecting a rise in jobless numbers in the coming months.

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