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IHS
Markit's March final manufacturing Purchasing Managers' Index
declined for an eighth month, coming in at 47.5 from February's
49.3, just below a flash estimate and its lowest reading since
April 2013.
An index measuring output change, which feeds into a composite
PMI due on Wednesday - seen as a good gauge of economic health -
sank to 47.2 from 49.4, its lowest since April 2013 and the
second straight month it has come in below the 50 level dividing
growth from contraction.
The disappointing results come after the ECB changed its outlook
last month. It pushed back the timing of an interest rate rise
until 2020 at the earliest and said it would offer banks a new
round of cheap loans to help revive the economy.
A Reuters poll last month found the ECB may have missed its
opportunity to raise interest rates before the next downturn.
Friday's PMI suggested that downturn was already underway - new
orders fell at their fastest rate in over six years, backlogs of
work were run down at their fastest pace since late 2012 and
factories curtailed purchases of raw materials as they
stockpiled unsold products.
"Looking at the forward-looking indicators, downside risks have
intensified, and the trend could clearly deteriorate further in
the second quarter," said Chris Williamson, chief business
economist at IHS Markit.
Optimism about the coming year deteriorated sharply. The future
output index dropped to 55.5 from February's 56.7, its lowest
since December 2012, and so factories barely increased headcount
last month.
(Editing by Toby Chopra)
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