Euro zone factory growth subdued on trade fears, rising prices - PMI
IHS Markit`s July final manufacturing Purchasing Managers` Index only nudged up to 55.1 from June`s 18-month low of 54.9, unchanged from an initial reading and still comfortably above the 50 level that separates growth from contraction.
Euro zone manufacturing growth remained subdued in July as worries about trade tensions, tariffs and rising prices kept optimism in check, a survey showed on Wednesday.
IHS Markit`s July final manufacturing Purchasing Managers` Index only nudged up to 55.1 from June`s 18-month low of 54.9, unchanged from an initial reading and still comfortably above the 50 level that separates growth from contraction.
The output index made a similar small move, rising to 54.4 from June`s 54.2, which was its lowest reading since November 2016.
"A marginal uptick in the PMI provides little cause for cheer given it is the second weakest number for more than one-and-a-half years. Worse may be to come," said Chris Williamson, chief business economist at IHS Markit.
"The clear implication is that manufacturers may have to adjust production down in coming months unless demand revives."
But a new orders PMI matched June`s 22-month low in July, the survey showed, which kept a lid on optimism. The future output index was 62.4, up from June`s 60.7 but one of its lowest readings in two years.
Demand may also have been hit by rising prices. Inflation across the bloc was 2.1 percent last month, above the European Central Bank`s target of just below 2 percent, official preliminary figures showed on Tuesday.
Last week, the ECB reaffirmed plans to end its 2.6 trillion euro stimulus programme this year and keep rates at their record low level "through the summer of 2019".
"The survey responses indicate that the slowdown likely reflects worries about trade wars, tariffs and rising prices, as well as general uncertainty about the economic outlook," Williamson said.
WATCH ZEE BUSINESS VIDEO HERE
An escalating trade row between the United States and its trading partners remains a real risk to the euro zone and has prompted many economists polled by Reuters to trim their growth forecasts. [ECILT/EU]
Euro zone economic growth slowed further in the second quarter, preliminary data showed on Tuesday, on what economists said were concerns over a possible trade war with the U.S..
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
IRCTC Dividend 2024: Railway PSU announces 200% interim dividend - Check record date and other details
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
02:38 PM IST