Eurozone recorded greatest contraction of manufacturing sector for nearly six years in March

According to the report from IHS Markit, manufacturing operating conditions in the eurozone deteriorated in March to the greatest degree for nearly six years.

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.