Euro area posts weak industrial growth again
EUROZONE industrial growth slowed as the month began, according to a major business survey of manufacturing firms in the currency union during February.
Data firm Markit’s purchasing managers’ index for manufacturing dropped to 53, from 54 in January, indicating a slower expansion. Any number over 50 suggests growth.
The figure for the services sector rose marginally from 51.6 to 517, but the slowdown for factories drove the composite index down 0.2 points to 52.7.
“While the Eurozone recovery continues, it is still struggling to gain enough pace to solve the region’s debt problems or erode the ample spare capacity in the economy. As a result, the European Central Bank (ECB) is likely to loosen policy further to combat disinflationary pressures, perhaps as early as its next meeting,” said James Howat of Capital Economics.
Eurozone consumer confidence also dipped this month, according to the European Commission’s initial estimate. The measure fell from minus 11.7 in January, to minus 12.7, adding further concerns for the health of the Eurozone economies.
“So far, the modest declines in the PMIs or Eurozone consumer confidence should not have alarm bells ringing. But disappointing inflation and unemployment figures next week could tip the balance towards more action in the ECB’s Governing Council,” said Christian Schulz, senior economist at Berenberg.
China’s manufacturing also suffered this month, according to Markit’s PMI data for the world’s second largest economy. The headline figure fell further below 50, down to 48.3, the lowest level recorded in seven months.
In comparison, US manufacturing posted a strong PMI reading for February yesterday, jumping to the highest level since 2010. The reading rose to 56.7 in February, up three points from January’s level, going some way to ease concerns that weaker figures were based on more than poor weather.