It slows down European industry. According to data published by Markit on Tuesday 51,2 March, the manufacturing PMI for the entire Eurozone fell to 52,3 in February, from 51 in January. The figure is slightly better than forecasts (50) and remains above the XNUMX level, which marks the boundary between expansion and contraction of activity.
Here are the changes in the PMI manufacturing indices recorded in the main economies between January and February.
ITALY: from 53,2 to 52,2, the lowest value in 12 months (57 in December).
GERMANY: from 52,3 to 50,5 (50,2 forecasts). It is the worst figure for 15 months.
FRANCE: from 50,0 to 50,2 (50,3 the preliminary reading).
SPAIN: from 55,4 to 54,1.
GREAT BRITAIN: from 52,9 to 50,8. It is the lowest result for 34 months.
OUTSIDE THE EUROZONE
JAPAN: from 52,3 to 50,1 (50,2 the preliminary estimate). It is the worst figure in eight months.
CHINA: 49,4 to 49,0, the lowest level since November 2011 (calculations by Caixin Insight Group).
USA: Chicago PMI index from 55,6 to 47,6 (forecasts at 53, calculations by the ISM institute).
MARKIT'S COMMENT: EUROZONE 'RAISES CONCERN'
Returning to the Eurozone, “the slowest growth in production in February in a year raises concerns about 2016 – comments Chris Williamson, Chief Economist of Markit –, which could be another year of slow growth or even with yet another contraction. The weak domestic demand has been combined with the worsening international situation, in fact exports decrease or increase marginally in all countries covered by the survey with the exception of Austria. For a region desperate to bring down its relative unemployment, near-stagnation in manufacturing job growth is somewhat disappointing news. Champion companies are being forced to cut new hires due to concerns about the future. At the same time, in an effort by firms to be more competitive, prices have fallen, suggesting that deflationary pressures have intensified. Input prices have fallen at a rate not seen since July 2009. With all indicators, from output and demand to jobs and prices, all lower, the survey will certainly add pressure on the ECB to act quickly and decisively to avoid another economic crisis”.
MARKIT'S COMMENT: “ITALY STARTED 2016 SLOWLY”
According to Phil Smith, Markit economist and author of the report on Italy, “the February survey confirms that the Italian manufacturing sector has started 2016 slowly. Growth rates of production and new orders showed a further weakening compared to record values observed during the end of 2015, while the levels of purchases from manufacturers did not increase for the first time in over a year. There was yet another rise in employment levels in February, a situation which can only continue if further losses in manufacturing growth are avoided. Cost contraction at least gives manufacturers more leverage to lower selling prices in an effort to drive sales, with 2016 expected to be another highly competitive year on price fronts.
