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Eurozone PMI falls to 12-month low in February

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Eurozone manufacturing
Europe   Markit Eurozone Manufacturing PMI

The rate of growth in the eurozone manufacturing sector continued to slow in February, as expansions in production, new orders, new export business and employment all lost momentum.

At 51.2 in February, from 52.3 in January, the final seasonally adjusted Eurozone Manufacturing PMI fell to a 12-month low despite posting slightly above its earlier flash estimate of 51.0. The PMI has remained above the neutral 50.0 mark for 32 successive months.

Manufacturing production rose at the slowest pace for a year, as rates of expansion in new business and new export orders eased to the weakest since April 2015 and January 2015 respectively. Job creation was registered for the eighteenth month running, but the rate of increase in staffing levels eased to a 12-month low.

National PMI data signalled growth in seven out of the eight countries covered by the survey, although only one (Austria) recorded a faster rate of increase than in January.

The Greek PMI fell back into contraction territory for the first time in three months, as production, new orders and employment all fell. The subdued performance of the "big-two" nations also weighed on the euro area PMI, with growth in both Germany and France only slightly above the stagnation mark.

The rate of expansion in German manufacturing output was the slowest since December 2014, as growth of both new orders and new export business eased further. This filtered through to the German labour market, with manufacturing job cuts reported for the first time in one-and-a-half years.

Although the France Manufacturing PMI ticked higher, the underlying dynamics of the data remained weak overall. Production, new orders and new export orders all contracted, leading to no change in manufacturing employment.

Italy, Spain and Ireland all saw their respective rates of growth for output, new orders and new export orders weaken during February. The Netherlands also saw production rise at a slower pace, while total new orders were unchanged compared to one month ago.

Brighter news was provided by the trend in employment for Spain, Ireland and the Netherlands, however, with job creation accelerating in all three.


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