The euro zone’s manufacturing activity surged at the beginning of the second quarter though industries lowered prices for the second consecutive month, reported financial research firm Markit Economics today.
Markit revealed that its Eurozone Manufacturing Purchasing Managers’ Index in April jumped to 53.4, up from 53.0 in March. This was better than the preliminary reading of 53.3 and is the tenth month that the measure has stayed past the 50 mark that divides growth and contraction.
Germany led much of the growth in the eurozone, though Italy and Spain recorded growth after earlier struggling. However, manufacturing activity in France remained feeble.
The manufacturing output index also rose from 55.6 to 56.5 over the period, just as earlier indicated in the preliminary report. The final Composite PMI reading will be realised on Tuesday.
“The euro zone PMI paints a promising picture for the region’s manufacturers at the start of the second quarter,” said Chris Williamson, chief economist at Markit, according to Reuters. “The recovery is becoming more broad-based and therefore hopefully more sustainable, as rising demand from each member state feeds growth in other countries.”
A flash reading showed that Italy’s PMI rose to its highest in three years, while Germany recorded improvement. Spain’s PMI tumbled one basis point from its highest level in four years that it touched in March. The French index fell to 51.2 in April from 52.1 a month earlier.
Eurozone policymakers, who will meet next week to deliberate on monetary policy, will notably discuss the declining factory prices in the economic bloc. The output price index declined to 49.2 in April, down from 49.3 in March, while April’s inflation in the eurozone jumped 0.7 percent from March’s 0.5 percent, which is less than ECB’s target of 2 percent.
“With factory gate prices falling for a second month running, policymakers will remain concerned about deflationary forces,” Williamson added. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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