Eurozone manufacturing PMI in April
According to a report by Markit Economics, the final Eurozone manufacturing PMI (purchasing managers’ index) has been falling gradually from its record high of 60.6 in December 2017. It stood at 56.2 in April compared to 56.6 in March. It meets the preliminary market expectations of 56.0 and was the weakest expansion in manufacturing activity in 13 months.
The Eurozone manufacturing PMI in April was mainly due to the following factors:
- Production volume and output growth weakened in April compared to March.
- New business orders and export orders rose at a slower rate in the same month. A stronger euro against the US dollar affected export orders in the economy.
- Employment growth in the manufacturing sector also improved marginally in April.
Impact on the economy
The gradual fall in its manufacturing activity is signaling that the overall Eurozone economies’ demand outlook is weakening. As the powerhouse of the Eurozone, Germany is also showing weakness in its economic activity.
Many analysts believe that the economic growth of the Eurozone could be marginally lower in 2018 compared to 2017. The iShares MSCI Eurozone ETF (EZU), which tracks the performance of the Eurozone (IEV), rose ~2.3% in April.
In the next part of this series, we’ll look at the performance of Japan’s manufacturing PMI in April.