Euro zone factory activity contracts faster in March

Credit: Reuters Studio
Published on April 1, 2019 - Duration: 01:38s

Euro zone factory activity contracts faster in March

Factories in the euro zone had their worst month for almost six years in March and forward looking indicators pointed to gloomy times ahead, a survey found, grim reading for European Central Bank policymakers.

Ciara Lee reports.


Euro zone factory activity contracts faster in March

Factory activity remained weak around the world last month doing little to banish fears of a global slowdown Forward-looking indicators also pointed to gloomy times ahead.

Euro zone manufacturers had their weakest month for almost six years in March, according to surveys from IHS Markit.

While China showed a slight, surprising recovery last month, growth in new domestic and export orders was marginal It's a further sign that stimulus already injected into Asia's growth engine may not be enough.

Factory activity in Germany, France, Japan, South Korea, Malaysia, and Taiwan shrank further Britain was an anomaly, with manufacturing growth at an unexpected 13-month high But that was driven by factories stockpiling for Brexit at an explosive rate.

Figures from Germany and France, the euro zone's two biggest economies, showed manufacturing activity contracted.

IHS Markit's March manufacturing Index, or PMI, for the euro zone declined for an eighth month coming in at 47.5 - well below the 50 mark that signifies growth.

Inflation news was also causing some concerns in the bloc.

It unexpectedly slowed in March.

Headline inflation in the 19 countries sharing the euro slowed to 1.4 percent well below the ECB's target of almost 2 percent.

The weak global environment is feeding back into the U.S. economy with the Federal Reserve abruptly ending its policy tightening last month A pause from the Fed has changed the game for many central banks.

Last month, the ECB changed its outlook.

It pushed back the timing of an interest rate rise until 2020 at the earliest and said it would offer banks a new round of cheap loans to help revive the economy

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