Factories in Greece and France suffered falling production and job cuts last month even while the sector across the eurozone enjoyed rising demand and output, according to the latest industry snapshot, reports The Guardian.
Manufacturing growth across the currency zone as a whole eased off slightly in April from March’s 10-month high, according to the latest eurozone manufacturing PMI poll by financial information company Markit. Ireland and Spain led the continued expansion although the pace of growth slipped.
Manufacturers also raised average selling prices for the first time since August 2014, news that will reassure policymakers at the European Central Bank (ECB) after launching a large-scale quantitative easing (QE) programme to head off deflation.
Since the 60-billion-euro-a-month stimulus programme was launched in March, economic data from the bloc has pointed to steadier growth – official figures last week showed the four-month run of deflation came to an end in April.
However, the latest manufacturing report highlighted the patchy nature of growth. The PMI report’s headline index slipped to 52.0 in April from 52.2 in March, its 22nd month above the 50 mark that separates growth from contraction.
“The eurozone manufacturing sector continued to grow in April, but the dip in the rate of expansion will serve to check recent optimism that the ECB’s quantitative easing programme has bought a guaranteed ticket to recovery for the region,” said Chris Williamson, chief economist at survey compilers Markit.
“Warning lights are flashing particularly brightly over France and Greece, both of which saw accelerating rates of decline at the start of the second quarter. Weaker rates of growth in Germany and Ireland are also cause for concern.
“However, the ECB asset purchase programme is still very much in its infancy, and given the concerns over Greece it’s not surprising that the road to recovery will be bumpy.”
Markit said the manufacturing report and early indications for April from the services sector pointed to quarterly GDP growth in the eurozone 0.4%. That would be in line with expectations in a recent Reuters poll of economists and compares with 0.3% growth in the final quarter of 2014.
The eurozone’s manufacturing sector continued to add jobs in April, with employment increasing at the fastest pace since August 2011. Headcounts were raised in Germany, Italy, Spain, the Netherlands and Ireland, but reduced in France, Austria and Greece, the PMI report said.