Brussels-European economic activity fell once again in September, a closely-watched survey showed Friday, heightening expectations that a recession was coming.

“The Eurozone economic downturn deepened in September, with business activity contracting for a third consecutive month,” S&P Global Flash Eurozone PMI said. “Although only modest, the rate of decline accelerated to a pace which, barring pandemic lockdowns, was the steepest since 2013.” The purchasing managers’ index fell from 48.9 in August to 48.2 in September -- with a score under 50 representing economic contraction.

“A eurozone recession is on the cards as companies report worsening business conditions and intensifying price pressures linked to soaring energy costs,” Chris Williamson, chief business economist at S&P Global Market Intelligence said. “Germany is facing the toughest conditions, with the economy deteriorating at a rate not seen outside of the pandemic since the global financial crisis.” Rocketing energy prices and steep rises in the cost of living are hitting demand and limiting manufacturing output. Inflation in the eurozone climbed to 9.1 percent in August, an all-time high, with analysts predicting the rate could reach double digits by the end of the year. 

The European Central Bank raised its interest rates by a record large 75 basis points this month, and has pledged to do all it can to curb the surge in consumer prices. Williamson said indications pointed to a eurozone contraction of 0.1 percent in the third quarter of 2022 and a steepening decline in the fourth quarter. “The challenge facing policymakers of taming inflation while avoiding a hard landing for the economy is therefore becoming increasingly difficult,” Williamson said. Meanwhile, new commercial vehicle registrations in the EU plunged 18.8% annually in the January-August period, the European Automobile Manufacturers Association (ACEA) said. Some 1 million commercial vehicles were sold in the 27-member bloc, according to the latest ACEA figures.

This negative trend was also seen in the region’s four largest markets, with Spain (minus 25.2%), France (minus 21.5%), Germany (minus 17.1%) and Italy (minus 11.1%).

In August alone, sales of new commercial vehicles in the EU declined for the 14th consecutive month by 8% to 110,261.

“The sharp drop in van registrations was the key contributor to the overall contraction of the commercial vehicle market. All key EU markets faced losses during the summer months, with the exception of Spain, which managed to post growth in August (+11.5%),” ACEA said.

In July, sales of new commercial vehicles were down 17.4% year-on-year to 123,145.