Steady Euro-Area Factory Output Masks Worries in PeripheryCarolynn Look
Activity in euro-area manufacturing slowed in July as uncertainty following the U.K.’s vote to leave the European Union damped new orders.
A Purchasing Managers’ Index dropped to 52 in July from
52.8, slightly less than a July 22 estimate of 51.9, Markit Economics said Monday. In Germany, the currency bloc’s largest economy, output expanded at the fastest pace in more than two years, while momentum faded in Italy and Spain and production declined in France and Greece. A reading above 50 indicates expansion.
“The PMI points to steady manufacturing growth” but “dig deeper beyond the headline numbers and more worrying pictures appear,” said Chris Williamson, chief economist at Markit in London. “The problem is that growth is looking increasingly lop-sided, which will worry policy makers and add to calls for further stimulus from the European Central Bank.”
The survey is the latest sign that uncertainty unleashed in the aftermath of the U.K.’s June 23 referendum is beginning to take its toll. ECB President Mario Draghi said last month that visibility as to the consequences of Brexit remains low, but that he remains ready to act if needed.
A weaker euro led to the first increase in average purchase prices in a year, Markit said. Output charges continued to decline, while new-order growth decelerated in July from a six-month high.
Data on Friday showed that the region’s moderate recovery was fragile even before the British vote, with economic growth in the second quarter slowing to 0.3 percent from 0.6 percent in the previous three months.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- ‘No Cash’ Signs Everywhere Has Sweden Worried It's Gone Too Far
- Boom Turns to Bust for Millennials Across Advanced Economies
- How One of the Most Profitable Trades of the Last Few Years Blew Up in a Single Day
- Dollar Steady, Oil Rises as European Stocks Falter: Markets Wrap
- Record ‘Black Panther’ Debut May Be a Game Changer for Hollywood