Manufacturing activity in the 13 nations that share the euro slowed in March against expectations for an increase, according to a closely watched survey on April 2. The eurozone's seasonally adjusted purchasing managers' index (PMI), compiled by NTC Research, fell in March to 55.4 points from 55.6 points in February, despite private economists' expectations for 56.1 points.
A reading above 50 indicates that the manufacturing sector is generally expanding, while a reading below 50 suggests that it is generally contracting.
Economists said that the slower growth in March meant that activity in the sector had passed its peak. "The eurozone manufacturing PMI softened modestly, and it is clear that the sector has lost some momentum compared to the giddy heights seen around mid-2006," said economist Howard Archer with consultancy Global Insight.
"Nevertheless, manufacturing activity is still at a pretty elevated level overall across the eurozone, with the output, new orders, backlogs of work and employment indices all at relatively healthy levels," he added.
The survey found that new orders grew for the twenty-second consecutive month although at a slightly slower pace than in February due to weaker export demand.
Although backlogs were still growing in March they were not expanding as quickly in recent months, taking some heat off capacity constraints.
Manufacturers sought to boost capacity by taking on more workers, with employment levels in the sector growing for the thirteenth month in a row.
Copyright Agence France-Presse, 2007
