A leading gauge of European industrial health has dropped to its worst level in 37 months, and the July index for German manufacturing fell at the fastest pace in more than three years, according to a poll of European companies.
The preliminary results of the July survey of businesses indicate further difficulties for the Eurozone in general, and Germany in particular, according to Chris Williamson, chief economist at pollster Markit Economics. “The downturn is being led by an increasingly severe slump in manufacturing, where output is falling at a quarterly rate of around 1%. Germany is now contracting at the steepest rate for three years, while the rate of decline in periphery is also among the highest seen since mid-2009.”
See: Head of Europe’s machine tool builders’ group says manufacturing can spur growth
The Markit Manufacturing Producer Manager’s Index (PMI) for the Eurozone in July fell to 44.1, distancing itself even more from the 50 level, the dividing line between growth and contraction. The PMI for manufacturing output dropped to 43.6, and order backlogs in the eurozone waned at the fastest pace since mid-2009.
In Germany, the July manufacturing index slid to 43.3 from 45 in June. The reading for manufacturing output declined to 42.8 from 44.8 the month earlier. Tim Moore, a senior economist at Markit, said: “July’s survey highlights that German business conditions are far less healthy than those seen during the first half of 2012, especially across the manufacturing sector where new export orders fell at the fastest pace for over three years.”
Sourced from etmm-online.com