Manufacturing activity in the euro area contracted by the most in three months in March, despite signs of increasing positive momentum in production, new orders and production. work A survey compiled by HCOB and S&P Global on Tuesday revealed the sentiment.
The final value of the Manufacturing Purchasing Managers' Business Index for March was 46.1, the lowest level in three months from 46.5 in February. At 45.7, the flash reading was even weaker.
Manufacturing production extended its decline to exactly one year. However, the pace of decline was the slowest since April 2023.
Similarly, new orders continued to decline, but the decline has slowed over the past five months.
Manufacturers preferred to use existing pre-production inventory and purchased fewer raw materials. Additionally, supplier delivery times have significantly shortened since September last year.
Commodity producers did more to clear backlogs. The rate of decline in uncompleted orders was the lowest since February 2023.
The decline in employees was slow and unchanged from what has been seen so far this year.
On the price front, the survey showed that input prices fell again in March, with the decline being the smallest in a year. Output prices have fallen significantly for the first time since November last year.
The survey highlights rising expectations among manufacturers. Optimism about the production outlook was the strongest since April 2023.
“It's a little disappointing. Over the past eight months, manufacturing has been gradually climbing the output PMI ladder, but it is still on the basement stairs,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Ta.
The economist said progress to the next level had not yet materialized, largely due to the slump in German and French industry.
“Given this, it is not surprising that our GDP nowcast model, which incorporates PMI data, predicts a continuation of the euro area manufacturing downturn,” Dell'Albia said.
There were significant differences in performance between Member States.
Spain once again reported modest economic expansion, and Italy recorded an economic recovery. Meanwhile, Germany and France remained mired in recession.
German manufacturing activity ended the first quarter with a solid contraction. The final manufacturing PMI was 41.9, down from 42.5 the previous month. FlashScore was 41.6.
French manufacturing endured another month of contraction. France's HCOB final manufacturing PMI stood at 46.2, down from February's 11-month high of 47.1.
Italy's manufacturing industry has entered growth territory for the first time in a year. Factory PMI in March was 50.4, up from 48.7 in February.
At the same time, the Spanish manufacturing industry economy Production increased by the most in a year and continued to expand. HCOB Manufacturing PMI in March was 51.4, down slightly from 51.5 in February.
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