Germany deepened the Eurozone’s downturn as confidence in the area’s manufacturing sector hit its lowest level since December 2012 last month, fresh data today revealed.
Economists warned the Eurozone was ired in a “sea of red” as Germany’s manufacturing output plunged to an 84-month low and Ireland to a 75-month low.
France’s 49.7 measure represented a four-month low but none was worse than Germany’s 43.2 measure on IHS Markit’s Manufacturing purchasing managers’ index (PMI).
Germany pointed the finger at its suffering auto sector and dwindling global demand for business equipment.
Anything below 50 represents a contraction. Only Greece and the Netherlands presented scores above that level.
The economic area experienced its sharpest fall in output and orders for 6.5 years for July, IHS Markit said.
Employment also fell at its steepest rate in over six years.
Purchasing managers pinned the blame on trade war tensions and Brexit as well as fears of subdued growth across Europe.
“The Eurozone PMI dashboard is a sea of red, with all lights warning on the deteriorating health of the region’s manufacturers,” warned Chris Williamson, chief business economist at IHS Markit.
“Rising geopolitical concerns, including trade wars and Brexit, and worries about slower economic growth both domestically and internationally were all widely reported as having subdued current demand and hit confidence in the outlook.
“The concern is that, while policymakers have become increasingly alarmed at the deteriorating conditions, there may be little that monetary policy can do to address these headwinds.”
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