European manufacturing is stuck in the mud

It’s manufacturing PMI day in Europe, meaning we’re finding out just how the continent’s manufacturers did in March.

The results are in, and the verdict? Not brilliant, but not terrible either. The Eurozone hit 51.6 in March, up from 51.4 in February, and ahead of the consensus of economists. So manufacturing is growing quicker than before, but only just.

The purchasing managers index (PMI) figures from Markit are given as a number between 0 and 100.

Anything above 50 signals growth, while anything below means a contraction in activity — so the higher the better.

Here’s Markit’s chart:

Chris Williamson, Markit’s chief economist said of the numbers:

Although the PMI ticked higher, March still saw the second-weakest improvement in manufacturing conditions seen for just over a year. The data suggest manufacturing grew by only around 0.2% in the first quarter, acting as a drag on the wider economy.

Williamson added that worries about deflation across the continent persists, saying:

Policymakers will also be worried by the further intensification of deflationary pressures in manufacturing supply chains, with prices charged at the factory gate falling at the steepest rate since late-2009. Discounting was widespread as firms competed on price amid weak demand

Across individual economies in the single currency, things were something of a mixed bag. Here’s a look at the manufacturing industries in some of the Eurozone’s biggest economies:

  • Germany — 50.7, a beat on economist forecasts of 50.5, and up from February’s reading.
  • France — Flat at 49.6, as expected, but manufacturing in the Eurozone’s second biggest economy is still in contraction.
  • Italy — 53.5, a beat on the expected 52.5, and well above February’s 52.2 reading.
  • Spain — 53.4, missing the consensus forecast of 54.1, the figure from February.
  • Greece — 49, still in contraction, but a slight recovery from February.

Earlier on Tuesday, China’s monthly PMI data showed that the country’s manufacturing industry jumped for the first time in eight months.

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