Thursday 1 September 2016 9:33 am

Growth in the Eurozone's manufacturing sector fell to a three-month low in August

Growth in the Eurozone's manufacturing sector fell to its lowest in three months in August, as jitters over Brexit continued to take their toll.

Markit's latest purchasing managers' index (PMI) for the sector fell to 51.7 – any figure above 50 denotes growth.

The figure pushed the euro down against the dollar. In early trading it was at $1.1134, 0.22 per cent lower.

Markit said the PMI was pushed down by a fall in new order inflows, which were at their weakest level of growth in 18 months. Meanwhile, manufacturing production fell to a three-month low. 

Read more: Manufacturing exports jump on weaker pound

Two of the eight nations covered by the survey experienced a contraction in their manufacturing sectors – with France and Italy both reporting a downturn. Meanwhile, Germany and the Netherlands registered "solid expansions".

It's been a similar situation in the UK: earlier this month its manufacturing PMI fell to its lowest level in more than three years following the Brexit vote. And Chris Williamson, IHS Markit's chief business economist, suggested Europe may follow.

"Eurozone manufacturers reported a wavering performance in August, with signs that growth could slow further in coming months," he said. 

"The rate of expansion dipped to a three-month low but is at least holding up in the face of the uncertainty caused by the UK’s vote to leave the EU. The survey indicates that factory production is growing at a steady though unexciting annual rate of just under two per cent."

"There is some suggestion of a Brexit impact, however, and growth may wane further in September after new orders growth slipped to a one-and-a-half year low. Anecdotal evidence suggests that the strengthening of the euro and reduced sales to the UK were partly to blame for the order book slowdown."

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