Eurozone manufacturing PMI slumps to 13-month low in August

Tom Brown

01-Sep-2014

Fall in pricesLONDON (ICIS)–August manufacturing sector output growth for the eurozone was found to have slumped to its lowest level since July 2013 in finalised data released on Monday by analyst Markit.

The region’s purchasing managers’ index (PMI) level for industrial growth fell to 50.7, down from earlier estimates of 50.8 for the month, and from 51.8 in July, as rates of new orders and export business continued to slow. PMI figures of above 50.0 indicate growth.

Germany’s manufacturing PMI, one of the key drivers of eurozone manufacturing output, was revised down to 51.4 for August, from earlier estimates of 52.0, on the back of the slowest production rate increases of the year, with companies noting a relatively weak economic environment.

Warning lights are flashing in Germany’s goods-producing sector… the survey data suggest that manufacturing appears to be in the midst of a slowdown,” said Germany report author Oliver Kolodseike.

France’s manufacturing sector PMI for the month was revised up to 46.9 from earlier estimates of 46.5, but the figure still represented the lowest PMI figure in 15 months.

This sort of across-the-board weakness [in France’s manufacturing sector has been a common theme in recent months and there remains very little to suggest any turnaround in fortunes will be imminent,” said Markit senior economist Jack Kennedy.

Manufacturing output for Italy and the Netherlands also slumped to their lowest levels in 14 months and 13 months respectively at 49.8 and 51.7, while Spain’s August manufacturing sector fell slightly to 52.8 but still boasted the fastest rise in new orders since April 2007.

Greece’s manufacturing sector returned to growth with a PMI of 50.1 compared to 48.7 in July due to the first increase in new orders seen in three months. Ireland bucked the overall bearish trend, with its highest manufacturing sector PMI figure in over 14 years at 57.3.

“Although some growth is better than no growth at all, the braking effect of rising economic and geopolitical uncertainties on manufacturers is becoming more visible,” said Markit senior economist Rob Dobson.

“The slowdown in industry is likely to add further fuel to the fire for analysts expecting additional monetary or fiscal stimulus to be implemented,” he added.

Eurozone manufacturing PMI output August 2014

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