Frankfurt: The eurozone’s manufacturing slump extended into a third month, with little to suggest that a turnaround is imminent.
A Purchasing Managers’ Index came in at 47.9 in April, up from March but still below the 50 level that would indicate expansion.
A gauge for factory output signals contraction at a quarterly rate of 1%, a major drag on an economy increasingly sustained by services.The 19-nation region grew 0.4% in the first quarter, more than economists predicted, supported by strong investment in Spain and buoyant consumer spending in France.
The European Central Bank has pinned its hopes on the economy recovering in the second half of the year.
Policy makers have indicated that updated forecasts in June will be key in determining the generosity of their new bank-lending program.
While new orders staged another sharp decline in April, there were also some encouraging signs. Manufacturers maintained their optimism that output growth will rebound in the next 12 months. Gauges of activity rose in all of the eurozone’s four biggest economies, even though the levels remained largely disappointing. — Bloomberg