The Eurozones economy lost momentum again in March as Germany and France's manufacturing sectors struggled to overcome global headwinds, according to a closely-followed indicator.
Manufacturers across the economic area suffered their steepest downturn in seven years this month, the IHS Markit Eurozone composite purchasing managers index (PMI) found today.
That meant the Eurozones PMI expanded only “modestly” to 51.3, the index warned, down from Februarys 51.9, and the third lowest reading since November 2014.
Anything above a measure of 50 indicates growth.
Manufacturing fell to 47.7 from 49.4 in February, its worst drop since April 2013, as the data revealed that output is now shrinking.
Both Germany and Frances manufacturing sectors entered decline, sending the euro 0.5 per cent down to $1.132.
Phil Smith, principal economist at IHS Markit, warned Germanys manufacturing downturn “has become more entrenched”, blaming Brexit uncertainty, the US-China trade war and a slowdown in car sales.
Overall, Germany skated close to hitting recession with a composite output reading of 51.5, while France began to contract, with a reading of 48.7.
IHS Markit economist Eliot Kerr added: “At the end of the first quarter, the French private sector was unable to continue the recovery seen in February, as both the manufacturing and service sectors registered contractions in business activity.”
The economic research firm warned that of all indicators, the biggest concern was the state of the Eurozone's manufacturing industry.
“Most worrying is the plight of the manufacturing sector, which is now in its deepest downturn since 2013 as trade flows contracted at the sharpest rate since the debt crisis-ridden days of 2012,” Chris Williamson, chief business economist at IHS Markit, said.
“The service sector is showing more resilienceRead More