European manufacturing stutters as global slowdown fears mount
European manufacturing activity contracted for the seventh month in a row, data published on Monday revealed, with British factories posting the sharpest drop in output for seven years, reigniting fears about a global growth slowdown.
The PMI (purchasing managers’ index) showed that although eurozone manufacturing activity inched up slightly to 47 in August (up from 46.5 in July), it remained well within contraction territory. It marked the second-lowest reading since April 2013.
Only France, Greece and the Netherlands recorded any growth in new order books, while Germany continued to record the biggest monthly drop.
Meanwhile, the UK PMI plummeted to 47.4 from 48 -- and came in a full point lower than analysts expected. The plunge came amid concerns about the increased possibility of a no-deal Brexit at the end of October.
Manufacturing is one of several closely watched indicators of a looming recession.
Germany, Italy, France and the UK are already struggling economically, teetering on the brink of a recession.
In April, the International Monetary Fund cut its global growth outlook to the lowest pace since the financial crisis began 12 years ago.
“This is a delicate moment” for the global economy, the IMF’s chief economist warned during a press conference, citing precarious trade negotiations between the U.S. and China, as well as uncertainty surrounding Britain’s planned departure from the European Union, which is slated to happen in October.