Eurozone manufacturing economy in contraction at start of Q2 2024

The latest Hamburg Commercial Bank (HCOB) purchasing managers’ index (PMI) for manufacturing compiled by S&P Global posted in sub-50 contraction territory for a twenty-second consecutive month in April.

At 45.7, down from 46.1 in March, the headline figure signalled a slightly faster rate of deterioration in euro area manufacturing business conditions as factory production shrank at the softest rate in a year, while business confidence improved further.

However, the sharpest decline in new orders in the year-to-date highlighted the ongoing challenges faced by euro area goods producers.

Suppliers’ delivery times once again shortened, and to the greatest extent in eight months.

There was a further reduction in manufacturers’ operating costs, although the decrease was only marginal and the slowest for over a year.

Output charges in the eurozone also fell, indicating efforts by firms to boost the competitiveness of their goods.

There remained considerable differences in country-level trends during April. The southern parts of the eurozone continued to perform the strongest, with Greece and Spain registering growth. They were joined by the Netherlands, which saw manufacturing conditions improve for the first time since August 2022.

Expansions in these three nations were more than offset by deteriorations elsewhere, however. Germany and Austria were again the worst performers, albeit with declines softening, an S&P Global release said.

Lastly, eurozone manufacturers turned more positive towards the 12-month outlook for production in April. The overall level of positive sentiment strengthened for a second successive month and was its highest since February 2022.

Fibre2Fashion News Desk (DS)