Slowdown in European Manufacturing: A Closer Look at the PMI and Key Factors Affecting Industry

Germany and France drag down industrial activity in the EU in March, despite Spain’s progress | Economy

European industry faces challenges, with the industrial production index (PMI) in the euro zone dropping in March to its lowest figure in three months. This decline was primarily due to contractions in the manufacturing sectors of Germany and France, which are the two largest economies in Europe. However, there are signs of improvement in countries like Greece, Spain, and Italy.

Despite the overall decrease in industrial production, the Eurozone manufacturing production PMI showed its best reading in the last 11 months in March. This indicates that a recession is not imminent. The slowdown in new orders also decreased at a slower pace in March, marking the fifth consecutive month of improvement. Additionally, the decline in export sales helped stabilize manufacturing demand in the euro zone.

Input costs for euro zone manufacturers continued to decline in March, while sales prices fell at the fastest rate in the last five months. HCOB chief economist Cyrus de la Rubia highlighted that the manufacturing sector is currently being impacted by underperformance of key countries like Germany and France, which typically drive growth of this sector.

In Spain, the manufacturing sector is struggling to recover as it recorded a 1.6% decrease

Leave a Reply