Eurozone factory activity slows S&P Global

RT.com
26 May 2023, 18:13 GMT+10

The key PMI index has plunged to a 36-month low, data shows

Manufacturing activity across the 20 countries that use the euro has declined at its fastest pace since the Covid-19 pandemic, amid a widening gap in global demand for goods and services, according to a study by S&P Global.

Published on Tuesday, the report showed that the Purchasing Managers' Index (PMI) for manufacturing dropped to 44.6 in May from 45.8 in April, and further below the 50-mark separating growth from contraction. A similar gauge of services fell to a two-month low, though its reading of 55.9 still signaled robust expansion.

The outperformance of services relative to manufacturing was the widest since January 2009, data showed.

Growth expansion in May was led by the Eurozone's largest economy, Germany, where output grew at the sharpest rate for 13 months, albeit confined to services. According to S&P, the biggest expansion of service sector output since August 2021 was countered by the sharpest fall in German goods production for six months.

France, the euro area's second-largest economy, saw growth slip to its lowest in the current four-month span of expansion, with weakened service sector growth accompanied by a further marked drop in goods production.

While the rest of the region as a whole reported growth for the fifth month in a row, expansion cooled to its lowest since February due to slower services growth and an increasingly steep fall in manufacturing output, the study found.

"GDP is likely to have grown in the second quarter thanks to the healthy state of the services sector," Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said in a statement. "However, the manufacturing sector is a powerful drag on the momentum of the economy as a whole. German companies from this sector are particularly hard on the brakes," he added.

According to the economist, the European Central Bank (ECB) will "have a headache" with the PMI price data because selling prices in the services sector actually rose more than in the previous month. "It is precisely price developments in this sector that the ECB is watching with a wary eye," de la Rubia explained, adding the "upward movement that can still be observed here is keeping the central bank from taking an interest rate pause."

For more stories on economy & finance visit RT's business section

(RT.com)

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Europe Sun.

More Information

20 ℃

Mostly Cloudy in Istanbul/Ataturk

International

Section

US to get tough as drone disrupts Pittsburgh airport

WASHINGTON D.C.: The Federal Aviation Administration has said that a drone sighting disrupted some flights at Pittsburgh International Airport this ...

New Oregon gun law being challenged in court case

PORTLAND, Oregon: A federal trial has begun in Portland, Oregon examining the constitutionality of a stringent gun control law approved ...

After removing Columbus statue, Philadelphia sued for return

PHILADELPHIA, Pennsylvania: Philadelphia Mayor Jim Kenney and members of the city's historical commission have been sued by a group which ...

Area evacuated as wildfire burns thru Michigan

LANSING, Michigan: Michigan's Department of Natural Resources said by a wildfire in the state has burned through more than 3 ...

Official: airlines industry acting to prevent cancellations

ISTANBUL, Turkey: In an interview with Reuters, Willie Walsh, director-general of the International Air Transport Association, (IATA), said airlines are ...

Protesting Texans send migrants to California

SACRAMENTO, California: Sixteen migrants from Venezuela and Colombia, who had entered the United States through Texas, were transported to California ...