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.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San