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- Eurozone manufacturing sector continues to contract during April
Eurozone manufacturing sector continues to contract during April
According to the report from IHS Markit, the eurozone’s manufacturing sector remained firmly in contraction territory during April.
After accounting for seasonal factors, Manufacturing PMI recorded a level of 47.9, up only marginally on March’s near six-year low of 47.5 (and little changed on the earlier flash PMI reading). The PMI has now posted below the 50.0 no-change mark for three months in succession.
In line with recent trends, the capital and intermediate goods sectors remained the principal areas of weakness in April. Both sectors remained firmly inside contraction territory, despite registering slight improvements in their respective PMI numbers. In contrast, the consumer goods sub-category continued to expand, with growth here rising to a modest level. The volume of new orders received by eurozone manufacturers continued to fall in April. Whilst not deteriorating to the same degree as in March (a 75- month record), the contraction in new work was again sharp. Moreover, export orders remained a source of demand weakness. Purchasing activity was also reduced in April for a fifth successive month, with the rate of contraction matching March’s near six-year record. Despite the ongoing reductions in production, orders, purchasing and work outstanding, a net increase in employment was recorded during April. With demand waning and competitive pressures persisting, manufacturers’ pricing power was limited.
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