Eurozone factory activity remained stagnant in May despite more price cuts. German production hit a four-month high, French manufacturing activity contracted again.
Eurozone factory activity remained pretty much stagnant in May despite manufacturers cutting their prices again according to analysis of the latest surveys of businesses.
“Manufacturing in the euro area remained stuck in a state of near-stagnation in May, failing to break out of the slow growth phase that has plagued producers since February,” said Chris Williamson, chief economist at survey compiler Markit.
“The disappointing performance of manufacturing adds to suspicions that the pace of eurozone economic growth in the second quarter has cooled after a surprisingly brisk start to the year based on the latest estimate of GDP,” he added.
Germany and France contrast
The exception was Germany where the surveys of manufacturers showed rising demand within the country – rather than exports – lifted production to a four-month high.
German companies also raised hiring for the second month running.
“New business also continued to rise despite subdued demand from international markets hindering a stronger expansion," said Markit economist Oliver Kolodseike.
France,” the region’s second biggest economy”:http://www.euronews.lan/2016/03/15/french-gdp-not-seen-as-enough-for-jobs-growth/, saw manufacturing activity contract for the third straight month in May, although not as sharply as in April.
Another round of price cuts failed to prop up sales.
New orders and export orders declined for the fifth consecutive month, while staffing levels fell for the third month in a row.
— Markit Economics (@MarkitEconomics) June 1, 2016