Growth in Europe’s manufacturing industry slowed last month and export demand fell to the lowest in seven months, adding to signs the economy is cooling after the second-quarter surge.
A gauge of manufacturing in the 16-nation euro region declined to 55.1 from 56.7 in the previous month, London-based Markit Economics said yesterday. That’s above an initial estimate of 55 released on Aug. 23.
It’s the 11th straight month with a reading above 50, indicating expansion.
An index of UK manufacturing also fell to 54.3 last month from a revised 56.9 the previous month, the lowest in nine months, the Chartered Institute of Purchasing and Supply and Markit Economics said in a statement in London yesterday.
While Europe’s economy grew at the fastest pace in four years in the second quarter, companies have been largely reliant on export demand to boost sales. Stocks in Europe and the US have dropped in the past two weeks on concern the global recovery is losing steam.
The recovery is “likely to remain bumpy and relatively gradual,” said Howard Archer, chief European and UK economist at Global Insight IHS in London.
“While still pointing to decent manufacturing growth, the softer survey reinforces suspicion that euro-zone manufacturers will find it increasingly difficult to sustain their impressive performance,” he said.
A measure of manufacturers’ new orders fell to the lowest this year, while the gauge of export orders declined for a fifth month, Markit said.
Employment increased for a fourth month, led by Germany, the Netherlands and Austria.
Germany’s manufacturing index slipped to 58.2 last month from 61.2 in July, matching an initial estimate, while the gauge for France rose to 55.1, higher than estimated. Italy’s measure fell to 52.8, lower than economists had forecast.
A composite index based on a survey of euro-area purchasing managers in both services and manufacturing probably fell to 56.1 last month from 56.7, while an index of euro-area services probably slipped to 55.6 from 55.8. Markit is scheduled to release final figures for those indicators tomorrow.
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