Manufacturing casts doubt on euro recovery

Chris Papadopoullos
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EUROZONE manufacturers suffered a slowdown in growth in April, ending a run of four months of expansion or steady growth.

A survey of private sector manufacturers – Markit’s manufacturing purchasing managers’ index (PMI) – published yesterday slipped to a score of 52 in April from 52.2 in March.

Scores above 50 signify growth – higher numbers imply faster growth.

“The modest slowdown in Eurozone manufacturing expansion in April is obviously a little disappointing but it is far from disastrous to recovery hopes,” said economist Howard Archer from analysts IHS.

“It remains to be seen whether April’s dip is primarily a correction following four months of overall improvement, or an indication that the pick-up in Eurozone economic activity is levelling off.”

Ireland and Spain led the pack with PMIs of 55.8 and 54.2 respectively, despite both seeing growth in the sector slow. Greece and France were at the bottom of the pile with PMIs of 46.5 and 48 respectively – a 22-month low for Greece.

Germany – the Eurozone’s largest economy – saw its manufacturing sector PMI scored 52.1.

“Warning lights are flashing particularly brightly over France and Greece, both of which saw accelerating rates of decline at the start of the second quarter,” said Chris Williamson, chief economist at Markit.

“Weaker rates of growth in Germany and Ireland are also cause for concern. However, the ECB [European Central Bank] asset purchase programme is still very much in its infancy, and given the concerns over Greece it’s not surprising that the road to recovery will be bumpy.”

Figures released yesterday showed that the ECB followed through with its plans to purchase €60bn (£44bn) of assets a month in April – it bought €47.7bn of government debt and €12.6bn of private sector debt.