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Greatest contraction of manufacturing sector for nearly six years in eurozone

Christian Fernsby ▼ | April 2, 2019
Manufacturing operating conditions in the eurozone deteriorated in March to the greatest degree for nearly six years, according to the latest PMI data from IHS Markit.
manufacturing sector
Europe   March marked a second successive month that the PMI has posted below the 50.0
After accounting for seasonal factors, the IHS Markit Eurozone Manufacturing PMI posted a level of 47.5, down from 49.3 in February and its lowest level since April 2013.

March marked a second successive month that the PMI has posted below the 50.0 no-change mark.

The PMI has been on a broadly downward trajectory since reaching a series record high at the end of 2017 and, in March, weakness was primarily centred on the intermediate and investment goods sectors.

Both categories registered notable deteriorations in operating conditions which was in stark contrast to consumer goods, where further growth (albeit modest) was recorded.

Looking at the latest data by country, the region’s three biggest economies all recorded sub-50.0 PMI readings during March.

The overall downturn was led by Germany, where operating conditions deteriorated to the greatest degree in over six-and-ahalf years.

Italy fared little better, with its PMI at a near six-year low.

France returned to contraction, having recorded modest growth in the preceding survey period.

In contrast, Greece saw its manufacturing sector enjoy its best month of growth in a year and thereby buck the wider regional trend.

The underperformance of the manufacturing economy was closely linked to a deteriorating demand environment.

According to the latest data, orders books contracted to the greatest degree since the end of 2012.

Export orders were down at the sharpest rate since August 2012.