The downturn in the 17-nation eurozone’s manufacturing sector deepened sharply last month, with even powerhouse Germany dragged down, a key indicator showed yesterday.
The Markit Eurozone Manufacturing Purchasing Managers’ Index (PMI) fell to 46.8 points last month, up from an initial estimate of 46.6, but well short of the already-weak 47.9 points posted in February.
The outcome left the closely followed indicator at a three-month low and below the 50-points boom-bust line since August 2011.
The average PMI score for the three months to last month was 47.5 points, which Markit said was the best performance since the first quarter of last year, but the latest figures showed a clear deterioration across the eurozone.
Germany slipped to a two-month low at 49 points, while “rates of decline gathered pace in all the other nations ... with the exception of France,” Markit said in a statement.
France stood at a three-month high of 44 points, while Italy was on 44.5, its lowest level for seven months, and Spain posted a five-month low of 44.2.
Markit warned that the data suggested worse could be to come, after recent figures had allowed analysts to hope that the economy might have finally touched bottom.
Manufacturing “looks likely to have acted as a drag on the economy in the first quarter, with an acceleration in the rate of decline in March raising the risk that the downturn may also intensify in the second quarter,” Markit chief economist Chris Williamson said in a statement.
“The surveys paint a very disappointing picture across the region, with all countries either seeing sharper rates of decline or — in the cases of Germany and Ireland — sliding back into contraction,” Williamson added.
He said that the Cyprus bailout appeared not to have had any impact so far, but “the concern is that the latest chapter in the [eurozone debt] crisis will have hit demand further in April.”
Meanwhile, Britain’s manufacturing sector shrank for a second consecutive month last month, a survey showed yesterday, leaving the country’s more resilient services sector as the best hope of avoiding a new recession.
The Markit/CIPS Manufacturing Purchasing Managers’ Index came in at 48.3, only slightly above February’s shock reading of 47.9 and a touch weaker than the consensus forecast.
The output component of the survey fell last month at its fastest pace since October last year.
The survey suggests that manufacturing exerted an even bigger drag on growth between January and last month than it did in the fourth quarter of last year, when it accounted for one-third of the British economy’s 0.3 percent contraction.
“The onus is now on the far larger service sector to prevent the UK from slipping into a triple-dip recession,” Markit senior economist Rob Dobson said.
The Markit report attributed the poor performance of manufacturing last month on tough market conditions, subdued client confidence and ongoing bad weather.