Markit eurozone Manufacturing PMI hits four-month low

02 May 2013 11:55  [Source: ICIS news]

LONDON (ICIS)--The Markit Eurozone Manufacturing Purchasing Managers’ Index (PMI) for April hit a four-month low of 46.7 with German manufacturing output contracting for the first time in 2013, Markit Economics said on Thursday.

The ratio between new orders and stocks of finished goods, seen by Markit as a good bellwether of future output, also hit a four-month low in April, consistent with the trend in manufacturing output remaining weak in coming months, it added.

“The fact that the Eurozone Manufacturing PMI came in slightly higher than its flash reading [of 46.5] offers little consolation to the fact that the index fell further in April, and suggests that the industrial sector is contracting at a quarterly rate of 0.5% at the start of the second quarter,” said Chris Williamson, chief economist at Markit.

“There is nothing here to suggest that manufacturing will turn the corner and stabilise any time soon, putting greater onus on policymakers to act quickly to reinvigorate growth,” he added.

The fact that prices charged by companies for their goods in April fell at the fastest rate since the start of 2010 brought mixed signals, Williamson said.

“An easing of price pressures is a good thing from a policy perspective, opening the door for further central bank stimulus. However, it is also a worrying sign of a lack of pricing power and deflationary forces, highlighting the extent to which demand has slumped in recent months,” he added.

The Eurozone Manufacturing PMI result followed Wednesday’s release of the UK Manufacturing PMI for April, which came in at 49.8 – slightly short of the “no change” level of 50.0 – which was an improvement on March’s 48.6.

David Noble, CEO at the Chartered Institute of Purchasing and Supply, described the UK result as “a chink of light in the tunnel” but stressed that manufacturing businesses were certainly not in rude health and remained cost cautious.

Markit also released the April HSBC Manufacturing PMIs for Poland and the Czech Republic. The Polish figure hit a 45-month low of 46.9, with Poland’s new export orders remaining weak, while the Czech figure inched up to 49.5 from 49.1 in March, with the pace of deterioration in manufacturing slowing, the financial information services company said.  

The HSBC Turkey Manufacturing PMI remained in positive territory in April, although the figure of 51.3 was the lowest in eight months and compared to March’s 52.3.

The pace of expansion slowed in Turkey’s output, new orders, new export orders and quantity of purchases, HSBC economist Melis Metiner said.

By: Will Conroy
+44 20 8652 3214

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