Eurozone manufacturing growth continues slowdown

Final data released by IHS Markit showed that manufacturing operating conditions in the Eurozone improved at the slowest rate for over four years in January. 

The IHS Markit Eurozone Manufacturing PMI came in at 50.5 last month, down from 51.4 in December, unchanged from the flash estimate. That was the lowest reading since November 2014. 

Volumes of new orders placed with Eurozone manufacturers recorded the sharpest contraction since April 2013 as domestic and international demand deteriorated further. In addition, backlogs of work fell for a fifth successive month and output growth was the weakest registered in the current 67-month run of expansion. Stocks of finished goods meanwhile increased in January for a fourth month in succession and to the greatest degree since the survey began over 20 years ago. Job creation was the softest since September 2016. On the price front, average input costs continued to increase during January, but at a noticeably slower rate with inflation dropping to its lowest level for nearly two-and-a-half years. Downward price pressure came from a reduction in the cost of oil-related goods plus signs of easing capacity constraints.

Nation-wise, Germany entered contraction territory for the first time in over four years whilst the downturn in Italy gathered pace. Despite recording relatively subdued readings, France and Spain bucked the trend across the region by recording firmer PMI numbers. All other nations recorded slower growth, with respective headline indices for the Netherlands, Austria and Ireland the weakest in around two-and-a-half years.