Manufacturing activity in the 15 countries using the euro slipped to the lowest rate for almost three years in May, with new orders continuing to fall, a survey showed June 2. The NTC Research's purchasing managers index (PMI) for the manufacturing sector fell to 50.6 in May, a bigger drop than expected and the lowest reading since August 2005. A figure above the 50-point level indicates growth in activity, while below it signifies a contraction.
The weak output growth reflected a drop in the level of new orders placed at eurozone manufacturers for the second month running, NTC said.
Germany bucked the trend among the eurozone's four biggest economies, seeing output growth accelerate to an eight-month high. Growth slowed to a seven-month low in France, while output fell in Italy, where the rate of decline hit a three-year high, and in Spain, where the fall was the steepest in the survey's 10-year history.
Jacques Cailloux, chief eurozone economist for the Royal Bank of Scotland, which sponsors the report, said eurozone manufacturing's continued growth "seems to be based on increasingly shaky foundations. In particular, output is expanding despite a drop in new orders and lower backlogs of work. This is particularly evident in Germany and in the production of investment goods, which has provided a key driving force behind growth in recent years."
Copyright Agence France-Presse, 2008