Eurozone manufacturing index at 13-month low

By Gokhan Ergocun

ANKARA (AA) - The Eurozone (EA19) Purchasing Managers’ Index (PMI) for the manufacturing sector dropped slightly in April to 56.2, from 56.6 in March, according to IHS Markit's report on Wednesday.

The Eurozone Manufacturing PMI by London-based global data company IHS Markit posted a three-month low of 59.6 in April, said the report.

"Although still signalling a solid rate of expansion, the upturn has lost noticeable momentum since the PMI hit a record high in December 2017," the report stressed.

The Netherlands PMI -- 60.7 -- was at the top of the eurozone rankings, while the Greek PMI was at the bottom with 52.9, the report showed.

The report revealed that five out of the eight nations covered -- the Netherlands, Germany, Italy, Spain, and Greece -- registered slower rates of growth than in the previous month.

Slower increases in new orders and employment caused the weaker growth signaled by the headline PMI, the report added.

"While the current pace of growth remains solid, the trend in the surveys in coming months will provide important clues as to the degree to which underlying demand may be waning and the extent to which policymakers should be concerned about the health of the economy," said Chris Williamson, the chief business economist at IHS Markit.

The Eurozone's new export orders also stood at its 17-month low, which linked to the recent strengthening of the euro exchange rate, especially against the US dollar, the report highlighted.

The report said that in April, eurozone manufacturing employment rose for the 44th month in a row.

In March the eurozone's unemployment rate was 8.5 percent, down from 9.5 percent in the same month of 2016, according to the Eurostat.

- Trade wars and Brexit worries

The report also underlined that input price inflation faced by euro area manufacturers remained substantial in April, reflecting ongoing rises in commodity prices, in some cases exacerbated by supply-side constraints such as raw material shortages.

Williamson said: "However, anecdotal evidence from the surveys also highlights how demand has been curbed by other issues such as the stronger euro and rising prices."

"Uncertainty has also intensified due to worries regarding trade wars and Brexit, underscoring downside risks to the outlook," he added.

Eurozone's annual inflation rate was 1.3 percent in March 2018, Eurostat said.