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Manufacturing growth in the Eurozone declines in April

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Manufacturing growth in the Eurozone declines in April

PMI falls slightly from March’s 11-month high.

Manufacturing growth in the Eurozone fell slightly in April, according the Markit Flash PMI report issued today.

The Markit Eurozone PMI fell from 54.0 in March to 53.5 in April. The slowdown reflected weaker rates of expansion in France and Germany, which offset an acceleration of growth in the rest of the region to the fastest since August 2007.

Although signaling an easing in the pace of expansion, the latest reading was still the second-highest seen over the past nine months. The manufacturing and service sectors continued to expand, but both saw rates of expansion cool compared to their ten- and eight-month respective highs seen in March.

"It’s too early to draw firm conclusions about whether growth is faltering again." 

In contrast to the slower rates of expansion seen in Germany and France, the rest of the region enjoyed the strongest growth since August 2007, with growth of new orders and employment also picking up to the highest since mid-2007.

Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said, “The weaker rate of expansion is a big disappointment, given widespread expectations that the ECB’s quantitative easing will have boosted the fledgling recovery seen at the start of the year.

“However, it’s too early to draw firm conclusions about whether growth is faltering again and the effectiveness of policy. Although the PMI has pulled back from March’s recent high, the index remains above the average seen in the first quarter and is indicative of the eurozone economy growing at a reasonably robust quarterly rate of 0.4% at the start of the second quarter.

“There are signs of increased risk aversion creeping in among businesses and their customers, linked in some cases to worries about Greece, which is likely to have dampened demand. However, in the case of France, the poor performance appears to reflect a longer-term malaise which, after a promising start to the year, in fact shows few signs of lifting.”

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