Trouble brews with factories in European Union seeing Feb orders stagnate
FACTORIES located within the European Union suffered their biggest decline in orders in six years amid mounting concerns over trade tariffs and Brexit
FACTORIES located within the European Union suffered their biggest decline in orders in six years amid mounting concerns over trade tariffs and Brexit.
Led by Germany and Italy, manufacturing output in the 19-nation region contracted in February, with a Purchasing Managers' Index falling to 49.3. Companies continued to report spare capacity and inflation pressures eased to levels last seen in late 2016, reported Bloomberg.
'Euro-area manufacturing is in its deepest downturn for almost six years,' said chief IHS Markit business economist Chris Williamson. Forward-looking indicators suggest 'risks are tilted further to the downside as we move into spring'.
The downbeat report from a key sector of the euro-area economy comes in the run-up to the European Central Bank policy makers meeting to decide whether the region needs another stimulus boost.
So far, officials are optimistic the bloc will emerge from its current rocky patch in the second half but weak demand challenges that prediction. The ECB is in the midst of revising its projections for growth and inflation through 2021.
While factories continued to create new jobs in February, they 'are likely to take a more cautious approach to hiring and investment and instead focus on cost control', Mr Williamson added.