Manufacturing activity across the euro area fell in April as falling demand caused factory prices to fall again and companies to cut jobs.
Regional performance disparities in Europe
The situation is different across the European region. France and Italy underperformed, but Spain grew at its fastest pace in almost two years. Unlike France and Italy, Spain recorded a rapid increase in activity.
Manufacturing fell to 45.7 in April from 46.1 in March, according to the latest Eurozone Manufacturing Purchasing Managers Index reported by S&P Global and released by HCOB. The index contracted further for the 22nd consecutive month. This reading is lower than expected, but at 46.8 it is slightly higher than the preliminary reading of 45.6.
Meanwhile, the production index for March was in line with the data, dropping to 47.1 from 47.3 in April. After the boost came in April.
Performance by country
Manufacturing activity in Italy retreated, with both production and new orders falling again. France's headline PMI also fell as production and demand fell again. The decline in purchases is accelerating, even though Germany's PMI is nearing breakeven.
Spain, on the other hand, had an unusual month in April, as evidenced by a report from the country's National Statistics Office published earlier this week showing that the rest of the Spanish economy grew much faster than expected last quarter. It was shown that a stable growth rate was recorded without any damage. 0.7%.
Manufacturers in central Europe also suffered in April, with factory activity in Poland reporting a further decline and ratings for the Czech Republic and Hungary eased.
The new orders index fell below 50 for the 11 months ending in May 2022, dropping from 46.0 to 44.1, the lowest level in four months. This means that the crisis still remains.
inflation concerns
Factories continued to deplete inventories of purchased goods and finished products while cutting workers for 11 straight months. Meanwhile, official figures released on Tuesday showed that the euro zone economy expanded to 0.3% in the January-March period after a mild recession in the fourth quarter.
Manufacturers are trying to keep interest rates under control, and manufacturing has been hit hard by inflation. Tuesday's data showed inflationary pressures visibly easing, raising hopes that the ECB will lower borrowing costs in June.
