Euro zone manufacturing PMI drops to 2-year low in August
Investing.com
Published Sep 01, 2011 04:11AM ET
In a report, market research group Markit said that its final reading the euro zone’s manufacturing purchasing managers’ index fell to a seasonally adjusted 49.0 in August, down from a preliminary reading of 49.7.
Analysts had expected the final reading to hold steady at 49.7.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
National PMI’s held just above the 50.0 no-change mark in Germany, the Netherlands and Austria, but signaled contractions in Ireland, France, Italy, Spain and Greece.
Only the Irish PMI rose compared to July, but still remained in contraction territory.
Output fell across the euro zone as a whole for the first time in just over two years, a worse outcome than the stagnation signaled by the earlier flash estimate.
Commenting on the report, Chris Williamson, Chief Economist at Markit said, “Final PMI data for August were even worse than the disappointing earlier flash numbers, signaling an end to the manufacturing recovery which began in October 2009.”
He added that, “With GDP having risen just 0.2% in the second quarter, there is a growing risk that the euro zone could slide back into recession in the second half of the year.”
Following the release of the data, the euro extended losses against the U.S. dollar, with EUR/USD shedding 0.47% to trade at 1.4305.
Meanwhile, European stock markets added to losses after the open. The EURO STOXX 50 fell 1.05%, France’s CAC 40 dropped 1%, the FTSE 100 declined 0.6%, while Germany's DAX sank 1.5%.
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