zone manufacturing growth eases in June, France slowdown
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[July 01, 2014]
By Jonathan Cable
LONDON (Reuters) - Euro
zone manufacturing growth eased slightly more than
previously thought last month and factories fulfilled
existing orders to keep busy, a business survey showed
A resurgence in the bloc's periphery countries supported Germany,
which was again the driving force, despite slower growth due to
extra public holidays. But in France - the bloc's second-biggest
economy - the contraction in activity deepened.
Markit's final Manufacturing Purchasing Managers' Index (PMI) for
the euro zone fell to 51.8 in June from May's 52.2, its lowest since
The final figure was just below a preliminary flash reading of 51.9
but has now held above the 50 mark that separates growth from
contraction for a full year. A subindex measuring output fell to
52.8 from 54.3, marking a nine-month low.
Some of that tepid growth was generated by running down existing
orders as new business increased at a slower pace than in May. The
backlogs of work index fell to a nine-month low of 49.5 from 49.6.
"The PMI survey will raise concerns that the euro zone recovery is
losing momentum. The overall picture is a reminder of just how
fragile the region's recovery is looking," said Chris Williamson,
chief economist at data collator Markit.
Having expanded a feeble 0.2 percent in the first three months of
2014, euro zone quarter-on-quarter growth is expected to be just
0.3-0.4 percent through to the end of next year. EUGDPQ
"The slowdown will put pressure on policymakers at the ECB to do
more to prevent the recovery from stalling, and we will no doubt see
more calls for full-scale quantitative easing to be implemented,"
The chance of the European Central Bank launching an asset purchase
program has risen to one-in-three, a Reuters poll taken last week
found, ahead of this Thursday's ECB policy-setting meeting.
[to top of second column]
ECB President Mario Draghi announced a raft of measures last month
to counter the threat of deflation and support growth, including
cutting the deposit rate below zero and offering more long-term
loans aimed at boosting bank lending to businesses.
Inflation held steady at just 0.5 percent last month, well below the
ECB's target of just below 2 percent and firmly in what it calls the
The PMI data showed factories raised prices marginally in June for a
second month but not as fast as their input costs rose.
(This refiled version of the story fixes dropped letter in the lead)
(Editing by Hugh Lawson)
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